Galvanizing Enterprises Enter Holiday Pace, Operating Rates Drop Sharply [SMM Galvanizing Weekly Review]

SMM January 30: The operating rate of the galvanizing industry was 46.09% this week, down 9.54 percentage points WoW. Raw material side, zinc prices continued to rise this week, downstream users were cautious about purchasing due to high prices, but long-term contract deliveries arrived, leading to a slight rebound in zinc ingot inventories at galvanizing enterprises. The main reasons for the decline in the operating rate were: 1. Environmental protection measures in north China continued to affect galvanizing enterprises' operations. 2. Approaching the Chinese New Year, most end-users were on holiday, demand weakened significantly, galvanizing order demand continued to weaken, while high zinc prices resulted in significant losses for enterprises. Most small and medium-sized galvanizing enterprises started holidays this week, and large galvanizing plants began production cuts gradually entering the holiday pace, significantly impacting the operating rate. As a result, the industry showed a "two increases, one decrease" pattern: end-user cargo pick-up pace slowed down significantly, finished product inventories at galvanizing enterprises climbed; meanwhile, the scope of enterprise holidays expanded, and the operating rate is expected to further decline to around 43.63% next week.