Post-Holiday Galvanising Enterprises' Operation Falls Short of Expectations, What Is the Future Market Trend? [SMM Analysis]

SMM February 21 News: Galvanising enterprises mostly resumed production between February 6 (the ninth day of the first lunar month) and February 13 (the sixteenth day of the first lunar month), while small and medium-sized enterprises generally resumed operations after February 13. The average holiday duration was around 20 days. However, overall consumption and end-user resumption fell short of expectations. As a result, the operating rates of galvanising enterprises have not yet returned to pre-holiday levels. By segment: Galvanised pipes were significantly affected by ferrous metals prices. After the holiday, ferrous metals prices showed a weak trend, coupled with slow progress in end-user resumption, leading to overall galvanised pipe sales falling short of expectations. According to SMM, orders for galvanised pipes in south China have shown improvement, particularly in agricultural and structural pipes. In January, the total issuance of special bonds amounted to 204.8 billion yuan, down 183.7 billion yuan MoM but up 148 billion yuan YoY. The actual issuance exceeded the planned quota by approximately 137 billion yuan. Although end-user projects resumed slowly after the holiday, the higher-than-expected issuance of special bonds suggests that the pace of infrastructure project implementation may improve. It is expected that overall galvanised pipe consumption in March will be better than in February. In galvanised structures, power grid steel towers remain a highlight this year. However, according to SMM, most steel tower projects were completed before the holiday. Although there were steel tower project tenders in February, it will take time for these to translate into galvanising industry orders. For galvanised steel tower orders, there may be a "gap period" in February and early March. Overall, the pace of ultra-high voltage (UHV) project initiation and tendering in 2024 was relatively slow. However, considering the urgency of new energy integration, five UHV DC lines are expected to commence in 2025. The State Grid Corporation of China is projected to invest 660–670 billion yuan in 2025, up approximately 10% YoY, making power grid steel towers a key growth area for galvanising. As for solar panel mounting brackets, the sector has entered a stable development phase. According to SMM forecasts, new PV installations in 2025 are expected to reach around 250 GW, with distributed PV accounting for 46% and centralised PV for 54%. As the share of distributed mounting brackets grows, the proportion of galvanised brackets in solar panel mounting brackets will decrease. Additionally, centralised PV construction is expected to gradually resume starting in April, contributing limitedly to galvanising consumption. On the export side, after Trump took office in 2025, tariff disputes have been ongoing. However, galvanised pipes and structural components are primarily exported to Southeast Asia, Australia, and the Middle East, and have not yet been affected by additional tariffs. Overall, export orders remain relatively stable, though galvanising enterprises are concerned about potential future tariff issues. Overall, the consumption of galvanised pipes and structural components has not met expectations after the holiday, but there may be a delayed demand recovery, which will take time to materialise.