Poor output, orders for stainless steel lower downstream nickel PMI for Apr

SHANGHAI, May 8 (SMM) – The purchasing managers' index (PMI) for the downstream nickel industries again fell below 50, to 42.55 in April, after it sharply gained 17.32 month on month to 64.65 in March, showed SMM data on Wednesday May 8. A reading below 50 indicates contraction.

For May, the preliminary PMI for downstream nickel industries extended its decline by 3.14 from April, to stand at 39.41, SMM survey showed.

A falling stainless steel market dragged the sub-index for production by 42.24 from March, to 36.12 in April. The production sub-index for the stainless steel industry lost 50.49 on the month as lower profits of the #300 series depressed production enthusiasm across mills. 

Peak-season demand extended in the alloy industry and this buoyed production last month. Growth in the new energy vehicle (NEV) battery market remained robust, and output across other downstream sectors such as nickel wire and mesh continued to improve in April. 

The sub-index for new orders also shrank sharply, by 41.37 on the month to stand at 34.92 in April, after a surge in stainless steel output in March caused a glut in the market. However, new orders in the NEV battery sector expanded as carmakers sped up production to chase subsidies before the transition period ends. 

Higher demand in the NEV battery industry also prompted battery mills to stockpile, lifting the overall sub-index for raw materials inventory by 2.34 from March, to 52.09 in April. 

Slow destocking of stainless steel bolstered the sub-index for finished product inventory above 50, to 58.73 in April, up 15.04 from March, after the index contracted for four consecutive months.