Galvanised Sheet Exports in the First Three Quarters were Sluggish, and What is the Forecast for the Fourth Quarter?

SHANGHAI, Nov 1 (SMM) - According to the latest customs data, the cumulative export volume of galvanised sheet in the first three quarters of 2022 totalled 6.77 million mt, down 16.96% from the 8.15 million mt in the comparable quarters of 2021. As far as the third quarter is concerned, the export volume of galvanized sheet was 2.22 million mt, a year-on-year decrease of 17.92% from the 2.71 million mt. As for September, China exported 580,000 mt of galvanised sheet, down 33.61% year-on-year and 23.65% month-on-month. SMM believes the total exports of galvanised sheet in 2022 will be lower compared with previous year, and the main reason is attributed to the reduced exports in September.

Judging from the monthly export volume of galvanised sheet in 2022, the export volume in September stood at 580,000 mt, which was only higher than that in February. It is known that in February the operating rates of galvanising companies were rather low during the Spring Festival holiday and the Winter Olympics. At the same time, the export tax rebates were cancelled, which also weighed on the export volume. Normally, the export volume in September shall be ample as the operating rates and raw material supply were under no restriction. However, the fact was that the export volume in September was merely a little higher than the lowest point of the year. It could be observed in the data that the export volume in the third quarter of 2022 was down 17.92% year-on-year, and that in September alone dropped 33.61% year-on-year.

Galvanised sheet sector is one of the major downstream sectors in terms of zinc consumption. Its future exports is of great concern.

Considering the changes in energy prices in the coming heating season, the natural gas costs in galvanised sheet production may increase by 10-18 yuan/mt, and the power costs may increase by 30-50 yuan/mt. As such, the galvanised sheet will become less attractive due its high costs. In terms of exporting destinations, the galvanised sheet with low zinc content mainly flows to South-east Asia, while the galvanised sheet with high zinc content is mainly exported to Europe, America, central Asia and other regions. Countries in South-east Asia usually pay more attention to the prices of galvanised sheet and compare the quality of different products under the same price. The three major importers of Chinese galvanised sheet in South-east Asia are Thailand, the Philippines and South Korea. In other words, if the price competitiveness of domestic galvanised sheet dropped in the future, it will exert a huge pressure on its exports.

The previous data shows that the export volume of galvanised sheet in the fourth quarter usually stands at the yearly low. As such, SMM believes that the exports of galvanised sheet will continue to be weak in the remaining months of 2022. It is expected that in the fourth quarter, galvanised sheet manufacturers will not plan to increase output on account of poor export orders. With the off-season underway, SMM is not optimistic about the growth in refined zinc consumption of galvanized sheet sector.