Secondary Zinc Oxide Payables Remained Relatively Firm, How Will They Perform in March [SMM Analysis]

Secondary Zinc Oxide Production Fell in February, While Secondary Zinc Oxide Payables Remained Relatively Firm. What Trend Will Secondary Zinc Oxide Show in March?

Raw material side: In February, affected by the Chinese New Year holiday, overall steel dust supply declined significantly. After entering March, as steel mills and electric furnace plants gradually resumed production, blast furnace dust and electric furnace dust supply rebounded markedly. However, due to environmental protection policy controls, overall steel dust supply this month still remained below the same period in previous years.

Production side: In February, some secondary zinc oxide producers saw production decline significantly from January due to Chinese New Year maintenance and holiday arrangements, but production still posted notable YoY growth. The core reason was that some secondary zinc oxide capacity was commissioned successively in H2 last year, while some enterprises had just resumed production in January and did not arrange holidays in February, maintaining normal production and thereby driving a sharp increase in output from the same period in previous years. After entering March, as secondary zinc oxide enterprises stepped up production resumptions, production was expected to continue growing.

Price side: In February, the secondary zinc oxide market was mainly characterized by enterprise holidays, and market supply remained tight. However, from the demand side, downstream enterprises such as secondary zinc and zinc calcine had already completed stockpiling of secondary zinc oxide in January, and most downstream enterprises entered maintenance and holiday shutdowns during the Chinese New Year period, causing market demand to weaken significantly from January. Under a market pattern of weak supply and demand, secondary zinc oxide payables still remained firm.

After entering March, steel dust supply increased, while enterprises related to secondary zinc oxide, secondary zinc, and zinc calcine gradually resumed production, and the market showed a trend of simultaneous increases in supply and demand. Supported strongly by raw material prices, secondary zinc oxide prices were expected to remain stable in March.