Marginal Improvement in Demand, Operating Rates Rise [SMM Weekly Review on Galvanizing]

SMM February 21 News: This week, the operating rate of galvanising producers recorded 54.28%, up 1.71 percentage points WoW. In terms of raw material inventory, zinc prices fluctuated upward this week, and downstream purchasing enthusiasm was low, with restocking mainly driven by rigid demand, leading to a slight pullback in raw material inventory. The weekly operating rate increased, primarily because most galvanising enterprises resumed operations after the Lantern Festival, with normal production throughout the week, resulting in more operating days compared to last week. For galvanised pipes, ferrous metals prices rebounded slightly this week, coupled with the gradual resumption of work by end-users, leading to marginal improvement in demand for galvanised pipes. Overall, orders in south China were better than in the north, with some agricultural pipes still seeing good demand, driving an increase in the operating rate of galvanised pipe producers. Regarding galvanised structural components, steel tower enterprises saw a decline in orders, with most orders completed before the Chinese New Year. A small number of enterprises are still fulfilling leftover orders from before the holiday. Although there were tenders in January and February, it will take time for these to materialise for galvanising enterprises. The PV sector remains in a quiet period, with tenders expected to start in March or April. Some export orders for structural components remained relatively stable. Demand is expected to continue recovering next week, with the operating rate projected to increase to approximately 55.17%.

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