Galvanising enterprises mostly had holiday arrangements during the Dragon Boat Festival, leading to a decline in operating rates of galvanising producers [SMM Weekly Review on Galvanizing]

SMM May 30: This week, the operating rate of galvanising producers was recorded at 52.17%, a decrease of 9.86 percentage points WoW. In terms of raw material inventories, zinc prices fluctuated upward this week. With prices pulling back at the beginning of the week, some downstream enterprises restocked slightly, leading to a slight increase in zinc ingot inventories. The main reason for the decline in the operating rate this week was that the end of the week coincided with the Dragon Boat Festival holiday, with most enterprises arranging holidays lasting 1-2 days and a few enterprises taking a 3-day holiday, which affected production. For galvanized pipes, ferrous metals prices pulled back significantly this week, leading to stalled orders and unsatisfactory sales. As a result, finished product inventories accumulated, and the focus was on reducing production to consume inventories. For galvanized structural parts, most enterprises reported weak demand. Additionally, with the onset of the rainy season in south China, some construction activities were restricted, and demand pulled back somewhat. Steel tower enterprises also reported that while orders were acceptable, they were not fully saturated, and there was significant competitive pressure. It is expected that next week, production will resume normally, and the operating rate may rebound to around 60.27%.

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