Composite PMI of Stainless Steel Sector in Contraction Zone in Jan due to Holiday Factor

SHANGHAI, Jan 31 (SMM) - In January, 2023, most players in the stainless steel market were closed early for Chinese New Year holiday, hence the composite PMI of the industry came in at 49.82, staying in the contraction zone.

Specifically, stainless steel mills mostly carried out maintained in the second half of January affected by weak demand and high costs, and the production index was below the 50-point market and stood at 49.5. Although the market demand was poor ahead of the CNY holiday, the players were optimistic about the post-holiday market. So the signing of orders to be delivered in the future was moderate, and the index for new orders recorded 50.13. Some stainless steel mills released a batch of goods to the market, and the in-plant stocks dropped to some extent. Hence the index for finished product inventory was 49.87. The index for raw material inventory came in at 50.13 as many stainless steel mills restocked raw materials for production post the holiday. The supplier delivery index was in the contraction zone and stood at 49.76 as the logistics services were halted during the CNY holiday. On the whole, both the supply and demand of stainless steel weakened further in January, and the industry as a whole was sluggish.

In February 2023, the market is more optimistic about the recovery of demand in February and March. Stainless steel mills may ramp up the production in February, and the purchase of raw materials may also pick up month-on-month. And the logistics services will also resume as well. Therefore, it is expected that the comprehensive PMI of the stainless steel industry will be about 50.21 with support from rising supply and demand.