SMM, December 27:
As 2024 Q4 is coming to an end, overall operating rates have far exceeded expectations. What will be the trend in Q1 2025?
According to SMM's weekly operating rate data, galvanizing operating rates in Q4 have shown a significant increase since November. This is mainly due to a series of policies announced by the government starting from late September, which boosted market confidence. Coupled with the gradual issuance of special bonds, end-user operations improved, leading to increased demand for galvanizing.
From the perspective of finished product inventories, affected by the off-season, most galvanising enterprises did not stockpile excessive finished product inventories, maintaining them at low levels. As demand gradually improved, the finished product inventories were not enough to support circulation, prompting enterprises to increase their operating rates. Additionally, ferrous metals prices have remained at relatively high levels, and end-user traders remain confident about future prices, leading to stockpiling activities. With demand significantly delayed and northern weather cooling later than usual, the completion of infrastructure projects slowed down. These combined factors resulted in Q4 operating rates far exceeding the same period in previous years.
Looking ahead to Q1 2025, as the Chinese New Year falls relatively early, some small enterprises are expected to start their holidays in mid-January, while larger enterprises will gradually begin their holidays around the Little New Year. Operating rates in Q1 are bound to decline.
