Consumption off-season is expected to end How will galvanizing consumption fare during the September-October peak season? [SMM Analysis]

The traditional off-season is about to end. Recently, due to the SCO summit and the military parade, galvanizing production has slightly weakened under the influence of environmental protection-driven production restrictions in the north. How will future demand look? Will the peak season be robust?

In terms of different segments: Galvanized pipes were significantly affected by ferrous metals prices. In July, the anti-"rat race" competition policies boosted ferrous metals prices, leading traders to "rush to buy amid continuous price rise and hold back amid price downturn," and timely replenish their stocks. Overall, the sales of galvanized pipes were moderate. However, as the policy stimulus weakened in August, and with infrastructure and real estate still performing poorly, coupled with extreme weather conditions, actual demand was weak. According to SMM, pipe factories generally believe that there is no clear distinction between peak and off-peak seasons currently. They expect overall pipe consumption in September and October to be better than in July and August but weaker YoY. During this period, the Yarlung Zangbo Hydropower Station project attracted market attention. On one hand, the project has a long cycle; on the other hand, its overall demand for galvanized products is limited and cannot drive significant growth in demand for galvanized pipe enterprises. Overall, the low point in demand is expected to end, and with improved weather in September and October, demand will marginally improve, and there may also be a situation where demand is deferred.

In galvanized structures, according to data from the National Energy Administration, the investment in power grid projects nationwide reached 331.5 billion yuan from January to July, up 12.49% YoY, with continued high growth in power grid investment. According to SMM, new steel tower tender orders have gradually started production since August, and four ultra-high voltage lines were approved in H1 2025, making power steel towers a major highlight for galvanizing orders in 2025. In the electricity sector, PV panel mounting brackets saw a pullback after explosive growth in May, and the proportion of distributed mounting brackets will gradually increase, while the share of galvanized mounting brackets in PV panel mounting brackets will decrease, leading to an overall reduction in zinc consumption by PV panel mounting brackets.

In terms of exports, tariff disputes have been ongoing this year. China and the US have reached a consensus to continue suspending the 24% tariff for 90 days. However, most galvanized pipes and structural components are exported to Southeast Asia, Australia, the Middle East, and Europe, with fewer exports to the US. The situation regarding export orders for galvanizing is moderate. Additionally, there are many communication and power projects in Africa and Southeast Asia, leading to good export performance for communication towers and steel towers. Overall, it is expected that exports will remain relatively stable.

Overall, during the September-October peak season, galvanized consumption is expected to marginally improve, with some positive expectations for demand.