SHANGHAI, Nov. 18 (SMM) - According to a most recent SMM survey, the average operating rate at galvanizers in October was 70%, down 5% from September's levels. Most enterprises surveyed are hot-galvanizers, galvanized steel tower, plate, sheet and tube/pipe producers, which are located in north, east and south China.
NBS data show China's shipbuilding completed 30.61 million dwt during January and September 2013, down 26.4% YoY, and new shipbuilding orders were 38.06 million dwt during the same period, up 147.1% YoY. Orders at shipbuilders in September were 113.97 million dwt, down 5.7% YoY, but up 6.6% from the end of 2012. Operating rates at downstream enterprises were thus boosted.
Investments in highway construction totaled RMB 105 billion in October, down 45.22% from RMB 191.7 billion in September, causing orders at highway fence and light pole to decrease. Some galvanized structure exporters reported low sales due to anti-dumping measures in Europe, US and Thailand, and when combined with anemic domestic demand, operating rates at galvanizers were low.
The average SMM #0 zinc price in October was RMB 15,089.44/mt, up RMB 200/mt from RMB 14,855.79/mt in September. Most enterprises purchased according to orders. Zinc prices continued to fall in November, dropping below RMB 15,000/mt, with some enterprises increasing purchasing.
Due to the opening of East Asian Games, most galvanizers in and around Tianjin were forced to cut or suspend production due to environmental protection inspections, which affected galvanized product output of those regions. After the East Asian Games, operating rates at galvanizers in and around Tianjin rose in November, but output did not grow noticeably due to ongoing inspections.
Grid investments are expected to grow in November, which will boost demand for galvanized products. As such, operating rates at galvanizers in November should rise slightly in November.