Operating Rates of Galvanising Plant Diverged in South and North China, with Average Operating Rate Extending the Fall

SHANGHAI, Nov 7 (SMM) - Last week, the average operating rate of galvanising plants rose slightly to 65.96%. As zinc prices fell, the galvanising plants increased restocking on dips, which led to an increase in raw material inventories. In north China, the recovery in steel prices improved the sales of galvanised pipes slightly, but as the weather turned colder, the end of seasonal high led to fewer terminal construction projects. Meanwhile, the enterprises were still bearish on steel prices, thus they maintained low operating rates. In east and south China, the outdoor construction became more active thanks to the favourable weather, hence the local operating rates were better than those in the north. In terms of galvanised structural parts, the orders for photovoltaic, iron towers and agricultural greenhouses were modest, but the orders for scaffolding still remained poor. The persisting pandemic in some areas continued to disrupt the transportation. In addition, some galvanising plants, whose products were intended for self-use, focused on digesting in-plant inventories based on bearish sentiment on steel prices. As a result, their operating rates were lower than enterprises who produced under tolling orders. The operating rates of galvanising plants are expected to decline further this week.