How Did Galvanized Sheet Perform in June Amid Continuous Processing of "Rush to Export" Orders?[SMM Analysis]

SMM June 17 News:

As Q2 draws to a close, SMM has learned that the operating rate of domestic galvanized sheet production in May declined by 1.1% MoM. With the arrival of the off-season, what are the market expectations for June? Can the relevant operating rates be sustained?

From the perspective of domestic trade orders, as ferrous metals prices continue to decline, the market sentiment remains cautious under the "rush to buy amid continuous price rise and hold back amid price downturn" psychology. Terminal orders for galvanized sheet plants basically meet just-in-time demand, and corporate profits have been somewhat compressed. Moreover, with the weakening of end-use demand in May, domestic trade orders for some enterprises also declined, leading to a reduction in operating rates.

Entering June, the plum rain season in south China has arrived, affecting outdoor construction activities. Orders for construction sheets have seasonally deteriorated, and summer sales promotions and inventory preparations for home appliance plants have been completed, resulting in mediocre performance of relevant orders. Although automotive sheets are supported by NEV orders, there has been no significant MoM increase. Overall, domestic trade orders are expected to continue to decline compared to May

From the perspective of export orders, SMM has learned that since April, when China began to strictly investigate the practice of purchasing export orders, overall export orders have been somewhat affected. Furthermore, although tariff rates significantly declined after the Sino-US negotiations in mid-May, the market remains concerned about potential tariff fluctuations in the future. Additionally, the "rush to export" orders in the early stage led to the early release of future demand, and a new round of "rush to export" did not materialize. As export orders from the early stage are gradually processed, orders received by some export enterprises in May showed a MoM decline. Combined with seasonal factors, new export orders received in June also received a mediocre response. Some export enterprises have chosen to increase the proportion of domestic trade to maintain their production levels.

In summary, from the perspective of galvanized sheet orders, both domestic trade and export orders declined MoM in June's off-season. Amid price wars, the market continues to experience cut-throat competition, and ferrous metals prices remain sluggish. It is expected that the operating rates of relevant sectors will continue to deteriorate compared to May. SMM will continue to monitor the subsequent performance of galvanized sheet exports.

(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research and decision-making. Customers should make cautious decisions and should not replace their independent judgment with this information. Any decisions made by customers are not related to SMM.)