Will Galvanised Zinc Plate Continue to Support Galvanised Zinc Consumption?

SHANGHAI, Dec 17 (SMM) - According to customs statistics, the cumulative net imports of galvanised plate from January to October 2021 increased by 48.1% year-on-year. The exports of galvanised plate rose significantly, and the main exporting countries are mainly Asian companies.

In Q1, the operating rates of galvanised plate plants were positive as there were fewer holidays approaching the Chinese New Year and overseas economy was recovering.

Overseas economy continued to recover in Q2 and demand from home appliances and automobiles rose sharply. EU passenger car sales increased by 25.2% year-on-year in H1 2021. Galvanised plate enterprises actively produced and even rushed to production as the export profits increased sharply and the Ministry of Finance and the State Administration of Taxation lifted 13% of the export tax rebate for some galvanised plate on May 1. The net exports of galvanised plate in April was as high as 968,900 mt, the highest level in recent years.

In Q3, the production of galvanised plate has been slightly impacted by bad weather like typhoons and rainstorms and dual control of energy consumption. Relevant authorities decided again to lift the export tax rebate for steel products since August 1, which also included a part of the galvanised plate export list. Although overseas demand was still recovering, the price spread between domestic and overseas prices was still obvious, and the shortage of overseas supply continued. From June to July, the export enthusiasm of enterprises was still relatively positive. However, the high ocean freight and the shortage of shipping containers still restrain exports to a certain extent.

In Q4, multiple countries implemented lockdown policy amid the Omicron variant. The export profits declined as raw material prices were at high levels and the price spread shrank. Besides, exports also declined as overseas employees increased and self-supply rose. The operating rate of galvanised plate plants declined amid falling orders from real estate, home appliances and other sectors.  Whether the exports of galvanised plate will continue to drive zinc consumption in 2022, it lies in whether the strong demand from overseas markets can be maintained and whether the price spread will continue, coupled with the changes in international political and economic relations.