Galvanizing Performance in Q3 Weaker Than Same Period Last Year: Will October See a Boost? [SMM Analysis]

SMM, September 23: The operating rate of galvanizing sector in Q3 was weaker than the same period last year. Will October change this situation?
Q3 marks the beginning of the traditional off-season. High temperatures and frequent rainfall hinder downstream construction projects, affecting downstream deliveries and leading to a decrease in orders. Besides weather reasons, starting in July, the impact of weaker off-season orders led to high inventory levels, and ferrous metals prices continued to decline. The strong correlation between ferrous metals prices and galvanizing prices further impacted already weak orders, resulting in poor sales. Downstream traders also changed their trading methods, avoiding large stockpiles. This situation only slightly improved by the end of August.
Entering September, ferrous metals prices stabilized, overall sales volume improved, and with the weather gradually returning to normal, downstream operating rates increased, and overall profits improved. However, overall orders did not see significant improvement and did not match the usual "September peak season" boom. According to SMM, most companies chose to take a 1 to 3-day break during the Mid-Autumn Festival, leading to a decline in the operating rate in the third week of September.
Looking at October, companies do not have high expectations for the release of new orders, hoping for new policy signals. It is expected that the operating rate in October will remain stable.