Operating rates at galvanising plants rebound 5 percentage points in Jul

SHANGHAI, Aug 13 (SMM) – Chinese galvanising plants stepped up operations in July, as orders improved after the government ramped up investment in infrastructure projects such as railways, iron towers and highways.

An SMM survey showed that the average operating rate across Chinese galvanising plants rose 4.59 percentage points from a month ago to 81.03% last month, after three consecutive months of declines. The July readings stood 2.69 percentage points higher than a year ago.

Despite weak property and automobile sales data, greater infrastructure demand led to larger-than-expected output at large galvanising plants.

Intensified anti-smog measures across northern cities such as top steelmaking hub of Tangshan since July and an anticipated consumption spike in October kept steelmakers optimistic about future prices for steel products.

This, together with front-loading on fears of a deepening in production curbs ahead of the 70th anniversary of the founding of the country, accounted for greater production at galvanising plants in July.

Production across galvanising plants is expected to hold stable in August, with the average operating rate dipping 0.02 percentage point from July to 81.01%, according to their latest production plans. The rate is likely to drop, if environmental authorities deepen production curbs.

The estimated readings would decline 0.77 percentage point from August 2018, lowered by galvanised plates, given downbeat sales data for passenger vehicles, refrigerators, air-conditioners and washing machines in the first week of the month.