The PMI for China’s Battery Sector Likely to Return to Expansion Territory in February on Post-CNY Production Recovery

SHANGHAI, Jan 31 (SMM) – The PMI for China’s battery sector stood at 49.64 in January. Affected by the Chinese New Year (CNY) and removal of NEV subsidies, there were very few new orders for Ni-MH batteries and ternary batteries in January. In response, most battery makers were closed for maintenance during the CNY holiday, leaving the production index at 48.87. Ni-MH battery companies did not hold excessive finished product inventory due to the stubbornly low installation capacity of such batteries. Ternary battery makers prioritised destocking to tackle severe inventory backlog and shrinking demand. On the whole, the finished product inventory index stood at 51.08 in January.

The production of Ni-MH battery is likely to pick up slightly in February compared with January amid limited orders. Ternary battery makers will still focus on destocking, with production unlikely to recover until mid-February.

SMM sees the PMI for China’s battery sector climbing to 50.11 in February.