SHANGHAI, May 6 (SMM)—Manufacturing activity across nickel downstream sectors in China retreated to the contractionary territory in April
SMM data showed that the purchasing manager's index (PMI) for downstream nickel industries, including stainless steel, electroplating, alloy and battery, stood at 49.9 in April, down 2.53 points from March. A reading below 50 indicates contraction.
- Production sub-index fell below 50
The composite sub-index for production in April lost 3.49 points from a month ago to 48.64. The production sub-index of stainless steel sector dropped 3 points, and that of battery sector fell by 12.85 points. The overall operating rates in April fell from the high levels in March. Stainless steel output remained high, slightly down on the month due to the production conversion of some mills. Most battery enterprises did not receive new orders in April, and the overall battery demand stood flat, while the output of some plants decreased amid the environmental protection inspections and circuit maintenance.
- Increase in downstream orders slowed down
The composite new order sub-index stood at 51.1 points in April, down 4.04 points from March. The new order sub-index fell 12.85 points to 51.31 points in the stainless steel industry and dropped 8.25 points to 50 points in the battery sector. The increase in downstream orders slowed down in April, mainly due to the high base in March. The overall orders of the industry is still increasing.
- Rising raw material prices suppressed the purchase
The composite raw material inventory sub-index fell 8.27 points to 47.39 points in April, and that of stainless steel sector stood at 47.62 points as nickel prices kept rising after fluctuating at low levels in April, downstream users were less willing to restock raw materials with the prices between 120,000-130,000 yuan/mt, and the inventories declined.
- Finished goods inventory sub-index was also above 50
The overall sub-index for finished products stocks stood at 50.85 in April, remaining in expansion. Finished products inventories at stainless steel mills fell slowly as rebounding nickel prices kept end users on the sidelines. The finished products stocks sub-index for the stainless steel sector came in at 51.14 in April.
