Off-Season Shadow Looms, Operating Rates of Galvanising Producers Continue to Weaken [SMM Galvanising Weekly Review]

SMM June 26: This week, the operating rate of the galvanising industry was 51.53%, down 5.18 percentage points WoW. Raw material side, zinc prices pulled back to a more acceptable level for downstream, leading to significant point-price restocking; however, cargo pick-up was slow, and zinc ingot inventory at galvanising enterprises edged up. By segment, the decline in operating rate was due to the galvanising sector entering the consumption off-season and south China entering the rainy season, which affected end-user operations. Galvanising demand weakened noticeably, with end-users mainly restocking on a rigid demand basis, while galvanising orders shrank sharply. The period coincided with the Dragon Boat Festival holiday, so many enterprises arranged time off. Among them, galvanised round pipe orders contracted severely, so holidays for galvanised pipe production were concentrated on round pipe lines, with relatively fewer square pipe lines taking time off. Structural steel tower enterprises basically maintained normal production but did not run at full capacity. Other orders without urgent delivery also had about one day off. Overall, the impact on operation was significant. However, due to persistently weak demand, the scheduled operating rate for next week rebounded to 53.64%, still below the pre-holiday level.