Weakening Demand, Galvanizing Operating Rates Drop Back Slightly [SMM Galvanizing Weekly Review]

SMM November 28: The operating rate of galvanizing producers recorded 56.54% this week, down 0.63 percentage points WoW. In terms of raw material inventory, zinc prices maintained a fluctuating trend at the beginning of the week, market performance was mediocre, downstream users mainly restocked based on rigid demand, and zinc ingot inventory decreased slightly. The reasons for the weekly decline in operating rate were: demand gradually pulled back by the end of November, ferrous metals prices rose slightly and then mainly maintained a fluctuating trend, coupled with gradually cooling weather in the north, downstream traders still purchased based on rigid demand without stockpiling behavior, overall orders were relatively mediocre, some galvanizing enterprises slightly lowered operating rates to digest finished product inventories and reduce finished product inventories. However, in south China, demand for greenhouse pipes and square pipes remained robust, but in some regions, zinc-aluminum-magnesium plates were used as raw material substitutes for galvanized pipes, which also affected galvanized pipe sales. Overall, the operating rate declined. In terms of galvanized structural components, steel tower orders remained resilient, but overall performance was weaker than the same period last year, procurement pace for some end-user projects slowed down, and some galvanizing enterprises implemented production cuts due to poor profits. Export orders remained relatively stable. Overall operating rates were weaker than the same period last year, but as the year-end approaches, some enterprises plan to complete annual production and sales tasks, increasing operating rates. The operating rate is expected to rise slightly to 56.88% next week.