Operating rates at galvanising plants drop 4.7 percentage points in Jun

SHANGHAI, Jul 15 (SMM) – Chinese galvanising plants further scaled back operations in June, as they remained under pressure from weaker demand and high costs.

SMM data released on Friday July 12 showed that the average operating rate across Chinese galvanising plants fell for a third straight month in June, declining 4.7 percentage points from May and from June 2018 to stand at 76.4%.

A heat wave across north China and heavy rainfall across the south restrained outdoor operations, and weakened orders for galvanised structural parts, while a low consumption season drove tube and pipe galvanising plants to slash production to rein in inventories of finished goods.

While demand from iron towers remained upbeat, that from rail transportation varied in different regions.

Continued weakness in auto sales and the end to the home appliance production peak, meanwhile, weakened demand for galvanised plates and sheets.

Operating rates across Chinese galvanising plants are unlikely to extend their losses in July, as demand has slowed to the bottom in June.

SMM expects the rate to inch up some 0.4 percentage point from June to stand at 76.9% this month, some 1.5 percentage points lower than July 2018.