Marginal consumption improvement in September; limited recovery in operating rates of galvanising producers [SMM galvanising weekly review]

SMM, September 11: This week, operating rates of galvanising producers averaged 52.49%, up 0.69 percentage points WoW. Raw material side, zinc prices continued to consolidate at highs this week before pulling back at the end of the week, but they still did not reach downstream producers' desired price levels. Raw material inventory remained at a low level overall, and stockpiling sentiment was cautious. Demand side, entering the traditional September peak season period, end-use consumption improved slightly MoM but the extent remained limited. Ferrous metals prices showed some stabilisation, but the transmission downstream was not smooth. Galvanised pipe sales performed modestly, and new orders did not show significant expansion. Some large mills slightly increased production and stockpiled at the beginning of the month. For structural parts, demand release was slow, and high zinc prices also exerted some restraint on the operating rates of small and medium-sized downstream mills. Overall, downstream operating rates edged up, and operating rates of galvanising producers are expected to consolidate to 52.58% next week.