Zinc Price Decline Drives Improved Operating Rates [SMM Galvanizing Weekly Review]

SMM, September 18: This week, operating rates of galvanising producers stood at 54.49%, up 2 percentage points WoW. Raw material side, zinc prices pulled back to downstream psychological price levels this week, coupled with pre-National Day stockpiling demand, enterprises showed increased purchasing enthusiasm, and zinc ingot inventory increased. Demand side, as end-use demand improved somewhat, orders at some galvanising enterprises recovered from earlier levels, driving a rebound in production schedules, but overall demand remained weak, with operating rates still at low levels YoY and no clear trend improvement in the industry yet. Overall, this week's rebound in operating rates was mainly driven by improved end-use demand and increased purchasing after zinc prices pulled back, but given limited recovery in end-use demand and mid-autumn holiday arrangements at some enterprises, galvanising operating rates are expected to pull back slightly to 54.32% next week.