Some Enterprises Restocked at the Beginning of the Month, Galvanizing Operating Rates Edged Up [SMM Galvanizing Weekly Review]

SMM August 14: This week, the operating rate of the galvanising industry stood at 52.62%, up 0.67 percentage points WoW. Raw material side, zinc prices stayed high this week, while enterprise purchasing remained mainly need-based and raw material inventories were generally low. Demand side, end-use consumption remained relatively soft; galvanised pipe shipments were sluggish and new orders were limited. Production side, in early August, some enterprises proactively raised production schedules to restock, driving a modest rebound in the overall operating rate. However, with insufficient demand absorption, some incremental output was not digested in time and finished product inventories edged up, putting some pressure on enterprises’ subsequent production schedules. In addition, recent typhoon weather continued to affect production and transportation in some regions, and a few enterprises temporarily suspended production, which also limited the rebound in the industry-wide operating rate. Overall, increased output at some enterprises drove a slight rebound in operating rates, but end-use consumption was not strong enough to absorb the additional output, and finished product inventories accumulated. The industry’s overall recovery remained constrained by demand. Next week, some enterprises are expected to continue production for restocking, but given demand constraints, room for further improvement in operating rates is limited; the rate is expected to rise to 53.2%.