Weakening Consumption, Operating Rates of Galvanising Producers Continue to Decline [SMM Galvanizing Weekly Review]

SMM May 29: The operating rates of galvanising producers stood at 58.33% this week, down 1.49 percentage points WoW. Raw material side, zinc prices fluctuated at highs this week, with downstream buyers restocking on dips for rigid demand, primarily focusing on digesting inventories, and zinc ingot inventories at galvanising enterprises declined notably. The decline in operating rates was mainly due to the onset of the off-season, compounded by rainfall in multiple regions, which weakened end-use demand and led to a notable drop in galvanizing orders. Meanwhile, as orders decreased, cut-throat competition in the industry intensified, and galvanising enterprises incurred losses on production, leading to more production cuts and shutdowns: some small galvanizing plants shut down directly, while large plants occasionally suspended production to digest inventories due to slow finished product inventory digestion, significantly impacting operating rates. Consumption showed no bright spots, and the operating rate is expected to edge down to around 58.31% next week.