Poorer demand extends decline in Dec operating rates at galvanising plants

SHANGHAI, Jan 11 (SMM) – Operating rates across Chinese galvanising plants averaged 78.4% in December, down 3.22 percentage points from November as suspended building works and outdoor operations lowered demand. On a yearly basis, rates stood 11.56 percentage points higher, SMM data showed.

Low inventory turnover of finished products eroded profits at galvanising plants, who tended to firm up offers and this further depressed sales. Tight supplies of natural gas in the heating season also lowered production enthusiasm across mills. 

For January, operating rates across galvanising plants will decline further as downstream demand weakened and workers cease work ahead of CNY on February 5. 

The average operating rate is likely to fall 13.03 percentage points from December to 65.37% in January, according to production schedules across mills. This is 26.48 percentage points higher from January 2018, when the greater impact of winter cuts and environmental probes significantly lowered rates.