Operating rate of galvanising enterprises fell last week

Last week the average operating rate of galvanising enterprises fell 1.13 percentage points from a week earlier to 63.71%. Downstream purchased as needed early in the week, growing raw material inventories slightly; weekly production fell slightly. Ferrous metals prices fluctuated strongly, and some large factories reported good orders. Meanwhile, brisk shipments a week earlier prompted producers to operate at a high operating rate in order to replenish inventories. The high price of zinc ingots grew the production costs of small and medium-sized enterprises, and the competition for orders was fierce, reducing profits. Some companies reduced production, and some small factories stopped production. In addition, galvanised pipe companies gave priority to reducing finished product inventory due to cost considerations. As such, finished product inventory decreased last week. There was no significant improvement in overall downstream demand last week. In terms of galvanised structural parts, orders from transportation infrastructure sector were lower than expected due to the policy factor. Orders from steel tower sector remained strong and from photovoltaic orders were relatively stable. It is expected that operating rates at galvanising plants will remain at the current level this week.