Summary: China's economic development is currently at a pivotal stage of growth driver conversion. The development of China's hot-dip galvanizing industry has entered a stage of the new normal. Recognizing, adapting to, and leading the new normal is the overarching logic for the sustained and healthy development of every hot-dip galvanizing enterprise.
China's economic development is currently at a pivotal stage of growth driver conversion. The development of China's hot-dip galvanizing industry has entered a stage of the new normal. Recognizing, adapting to, and leading the new normal is the overarching logic for the sustained and healthy development of every hot-dip galvanizing enterprise.
Galvanizing is a surface treatment technology that coats a layer of zinc on metals, alloys, or other materials for aesthetic and anti-rust purposes. The main method is hot-dip galvanizing, with cold galvanizing and mechanical galvanizing also used. Galvanized products can be divided into galvanized sheets/coils and galvanized structural components. The main downstream applications include infrastructure, real estate, and automobiles. Galvanizing accounts for the largest share of zinc downstream consumption, at 65.05%.
China's major zinc-consuming provinces remain concentrated in coastal and surrounding regions. North China, East China, and South China are the main contributors to zinc consumption, accounting for over 80%. Among them, North China is the primary galvanizing distribution area. Tianjin, as a municipality directly under the central government, is the economic center of the Bohai Rim region as approved by the State Council and the central city for galvanizing consumption in northern China. Northern cities have a large number of galvanizing enterprises, and the largest galvanized structural component enterprises in the country are located in Tianjin, Hebei, and other areas. North China accounts for about 60.34% of the national galvanizing consumption.
After the heavy blow of the pandemic, the galvanizing operating rate in February was only 23.38%, the lowest since 2015. Since then, the operating rate of galvanizing enterprises has continued to rise, and since April it has exceeded the level of the same period last year. In August, the galvanizing operating rate was 99.93%, up 17.82% year-on-year and 4.53% month-on-month.
At present, galvanizing consumption is generally stable. The galvanizing operating rate is expected to be 99.89% in September, down 0.04 percentage points month-on-month.
This is mainly due to the impact of environmental protection rectification in Daqiuzhuang, Tianjin, on consumption in the Tianjin area. Large enterprises are less affected, but small and medium-sized enterprises need to cut or suspend production until they meet environmental standards, which is expected to affect about half a month. In other regions, with terminal projects gradually put into operation, order consumption is expected to increase. In the long run, although the pandemic caused a collapse in domestic galvanizing consumption in 2020, it still shows strong resilience, mainly because domestic infrastructure projects provide support against the backdrop of national policy support.