SHANGHAI, Jun. 18 (SMM) – Average operating rate at Chinese galvanizers fell 4.7% from April to 82.2% in May due to poor orders, Shanghai Metals Market learnt.
Sluggish orders at galvanized tube/pipe, street light and light pole producers were mainly blamed for the decline, SMM survey showed. The slackening real estate sector dragged down orders at some galvanized tube/pipe by nearly 50%.
Orders at galvanized steel tower producers, however, were brisk thanks to power grid construction, especially ultra-high voltage grid construction. This, combined with strong export orders, helped support their production in May.
Average operating rate at domestic galvanizers is expected to fall further in June due to no improvement in the real estate market, environmental protection inspections and high temperatures, SMM foresees.
The SMM survey also revealed that domestic galvanizers were wary of building up raw material inventories given high zinc prices and disappointing orders, generally holding inventories for a week of production.