Consumption Weakens, Operating Rates of Galvanising Producers Weaken [SMM Galvanising Weekly Review]

SMM, June 18 – This week, the operating rate of the galvanizing industry was 56.72%, down 0.77 percentage points WoW. Raw material side, last week zinc prices pulled back to a level more acceptable to downstream users, who heavily engaged in point-price restocking. This week, downstream users mainly picked up goods, so zinc ingot inventories at galvanising enterprises edged up. By segment, the galvanized pipe segment entered the off-season for consumption, and south China entered the rainy season, affecting end-user operating rates. Galvanizing demand weakened significantly, with end-users mainly restocking based on rigid demand. Galvanizing orders fell sharply, and large mills reduced their shift schedules compared to before, leading to a noticeable drop in operating rates. As for galvanized structural parts, they were also affected by the consumption off-season. Orders for steel towers were relatively stable, but profits declined YoY, while orders for other small export items were relatively stable. Orders for transportation, light poles, etc., all showed off-season characteristics. Enterprises shifted to a mode of concentrating production when there are orders and taking holidays when there are none, which had a significant impact on overall operating rates. Next week coincides with the Dragon Boat Festival holiday, and some enterprises have holiday arrangements. The operating rate next week is expected to drop to around 54.68%.