Ferrous Metals Prices Continue to Weaken, Dragging Down Operating Rates of Galvanising Producers [SMM Galvanizing Weekly Review]

SMM August 21 News: This week, the operating rates of galvanising producers recorded 57.42%, a WoW decrease of 1.12 percentage points. In terms of raw material inventory, at the beginning of the week, zinc prices were low, and some companies took the opportunity to restock. After zinc prices slightly rebounded, the restocking sentiment weakened, and zinc ingot inventory increased. The main reason for the higher weekly operating rate was: due to the continued weakness in ferrous metals prices, downstream demand remained weak, with almost no restocking by traders. Sales of galvanized pipes were sluggish, and some companies arranged holidays or reduced production to digest inventories, while finished product inventories increased significantly. Galvanized pipe enterprises still do not have a positive outlook on next week's prices, and the planned production schedule is expected to decrease. For galvanized structural components, there was an increase in steel tower tenders, and overall, steel tower enterprises maintained good operations. However, in the north, some companies implemented production restrictions due to environmental protection issues, which slightly affected operations. Overall, in the Tianjin area, A-level enterprises are currently unaffected, B-level enterprises have 50% production restrictions, and C-level enterprises have suspended production. It is expected to last until September 4th. In surrounding areas such as Tangshan and Hengshui, production restrictions will be determined based on weather conditions, and currently, there are no plans for production restrictions. It is expected that the operating rate will pull back to 56.81% next week.