Losses, poorer demand extend decline in Nov operating rates at galvanising plants

SHANGHAI, Dec 14 (SMM) – Operating rates across Chinese galvanising plants averaged 81.62% in November, down 2.4 percentage points from October, SMM data showed. On a yearly basis, rates dipped 1.36 percentage point after an increase of 4.2 percentage points in October.

Falling prices of steel products grew costs across galvanised steel structure plant expanded their losses. Weak prices of ferrous metals also deterred downstream buyers purchasing enthusiasm for galvanised products.

For December, cold weather in the north will further weigh on outdoor operations across galvanising plants. While steel prices showed signs of stopping their decline, slower consumption will limit any upward momentum in operating rates across those manufactures, SMM believes.  

The average operating rate is likely to fall 1.5 percentage points from November to 80.12% in December, according to production schedules across mills. This is 13.28 percentage points higher from December 2017, when the greater impact of winter cuts significantly lowered rates.