SHANGHAI, Dec 30 (SMM) - The stainless steel sector remained sluggish in December, with its PMI at 49.17. In detail, the index for production stood at 49.29 for the total output in December was slightly lower than that in November. It was attributed to the production cuts of some stainless steel mills in the second half of the month. The index for new orders also stood below the 50-point mark at 49.9, since the spread of the pandemic has led to low operating rates of downstream processing plants and weak terminal consumption. In addition, the pandemic also disrupted the domestic logistics, so the supplier delivery index dropped to 49.5. On the whole, the supply and demand of stainless steel were both weak in December. The sudden outbreak of pandemic weighed on the pre-holiday stocking, which might be less active than in the previous month and the comparable months in previous years.
The time for sales is actually short in January 2023 owing to the New Year's Day holiday and Chinese New Year holiday. It is expected that the orders for stainless steel may continue to decline. However, the market is more optimistic about the consumption of stainless steel in the wake of the CNY holiday. Since stainless steel plants are likely to increase the production in February, they may step up the purchase of raw materials in late January. Stainless steel mills also planned to maintain normal production during the CNY holiday, but due to the restricted logistics, the supplier delivery time may be stretched. Therefore, it is estimated that the composite PMI for the stainless steel sector in January will stand at 49.95. The sector will remain weak in January, but is likely to pick up in February.
