[SMM analysis] galvanized start-up rate fell further in May and there was no new growth in demand in June.

SMM6 12 / 12 / PRNewswire-FirstCall-Asianet /-

After gold 3 and silver 4, the terminal consumption is stable and weak, while the black raw material remains high due to cost reasons, under the double pressure, the finished product inventory of galvanizing pipe plant remains high and the cost upside down pressure has not been alleviated; in the late second quarter, in addition to rail crossing and tower demand continues to improve, infrastructure to galvanize consumption boost and no new growth point, galvanized start-up rate recorded a decline.

Galvanizing consumption is expected to be stable and weak in June, and there is no new effective growth point of galvanizing consumption.

First, at the end of the second quarter, the high temperature weather in the north and the rainy season in the south will affect outdoor operations, the terminal demand will further weaken, the negative impact of weak demand on galvanizing start-up will be strengthened, and the galvanizing start-up rate is expected to continue to decline.

Second, since the beginning of the year, with the cold rolling-hot rolling price difference continuously narrowing to far below the cost line level, steel mills take the initiative to adjust the production line, hot rolling output expansion and cold rolling output contraction, into the hot rolling social inventory at the end of May it is difficult to keep the hot rolling price firm, although the cold rolling is still in a negative state, but the cold rolling-hot rolling price difference began to rebound low, galvanized pipe mill upside down cost pressure began to weaken. Although the cost clamping is weakened, but the terminal demand is not vibrating galvanizing pipe plant operation rate is still expected to have a substantial increase.

Third, high-speed rail, rail and tower orders to maintain good, some parts of the northern municipal projects began to speed up, road lamp poles, highway guardrail, etc., but there is no universality, mainly to boost this as the main terminal of small and medium-sized enterprises; and North China, East China to real estate, automobile demand-led galvanized structure enterprises continue to be weak, under the differentiation of structural components demand has no bright spot.

The galvanizing start-up rate is expected to be 78.9% in June, down 2.23 percentage points from the previous month and 2.26 percentage points from the same period last year.