China Nickel Downstream Sectors PMI Remained in a Contraction Range in November

SHANGHAI, Dec (SMM) - SMM data showed that the purchasing manager's index (PMI) for downstream nickel industries, including stainless steel, electroplating, alloy and battery, stood at 49.92 in November. A reading above 50 indicates expansion.

Production index rose month-on-month due to recovered production from power rationing

The composite index for production in November came in at 51.79, and the readings for stainless steel, battery and galvanizing sectors were 52.29, 50.21 and 48.84 respectively, all of which were greatly better than in October after the output picked up after the power rationing eased. Looking into December, the overall output is likely to increase again on the month as the power rationing will basically end.

New orders index performed poorly as stainless steel sector was in seasonal low

The new orders index in November stood at 48.33, mainly because the battery and stainless steel sectors were sluggish. The stainless steel sector was in seasonal low, while the nickel sulphate market stepped into short-term oversupply amid concentrated commissioning of production capacity. It is expected that the new orders index will stay low in December as the market has not seen signs of recovery.

Purchasing price index slid and manufacturers faced less pressures from raw material costs

The composite index for purchasing prices stood at 48.49 amid falling costs at the raw materials side caused by weakening nickel prices and calling back NPI prices. Going forward, the raw materials costs are likely to weaken further due to the current low demand.

Finished products inventory dropped month-on-month as manufactures actively made shipments

The composite index for finished products inventory was finalised at 49.15, and the declines from last month were mainly contributed by the nickel sulphate sector, as the manufacturers had to lower the finished products inventory amid short-term oversupply as a result of continuously rising nickel sulphate output.

Preliminary PMI for December

The preliminary composite PMI for nickel downstream sectors is basically flat on the month at 49.93 in December, staying in contraction.