Galvanizing Enterprises Resume Production, Operating Rates Rebound [SMM Galvanizing Weekly Review]

SMM January 9: This week, the operating rates of galvanising producers showed a slight rebound, reaching 54.39%, up 1.41 percentage points WoW. Raw material side, zinc prices broke higher at the start of the week, dampening downstream purchase willingness, and galvanising enterprises focused on digesting existing inventory, leading to a decline in zinc ingot inventory levels. The rebound in operating rates was mainly driven by the following factors: first, large producers that halted operations for year-end inventory counting last week gradually resumed production this week; second, the lifting of environmental protection alerts allowed previously restricted enterprises to resume production. However, holiday arrangements for some companies during the New Year's Day holiday constrained the increase in operating rates to some extent. Demand side, performance was mixed: a rebound in ferrous metals prices towards the end of the week improved shipments of galvanized pipes, boosting production willingness among enterprises, but overall demand in January showed a seasonal pullback, with insufficient procurement enthusiasm from end-users, and enterprises maintained a cautious stance towards subsequent demand and winter stockpiling. By segment, orders for structural components such as guardrails and lamp poles weakened, while steel tower orders remained relatively resilient. Looking ahead to next week, as large galvanising enterprises continue to release capacity, the industry's operating rate is expected to further rebound to around 55.83%. However, considering seasonal demand pullback, upside room for the operating rate may be limited.