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

SMM June 5: This week, the operating rate of the galvanising sector was 57.73%, down 0.6 ppts WoW. Raw material side, zinc prices fluctuated at highs this week, with downstream users restocking on rigid demand, mainly through long-term contracts, and few purchases made at point prices. Zinc ingot inventories at galvanising enterprises edged down slightly. The decline in operating rates was mainly due to the off-season for consumption, with end-use demand weakening notably. End-users primarily restocked on rigid demand, while galvanising orders decreased sharply, leading to a marked drop in enterprise operating rates. Cut-throat competition in the galvanising sector intensified, and production losses at galvanising enterprises led to production cuts or shutdowns. Smaller plants were hit harder, with some reducing the number of operating shifts or suspending production for a break. Looking ahead, no bright spots emerged in consumption, and operating rates are expected to edge down slightly to around 57.70% next week.