Post-Holiday Secondary Oxygen Coefficient Continues to Pull Back and Stabilize, What Will Be the Future Trend? [SMM Analysis]

Published: Feb 28, 2025 17:50

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【Post-Holiday Secondary Oxygen Coefficient Continues to Pull Back and Stabilize: What Will Be the Future Trend?】 Raw material supply side, after the Chinese New Year, end-user resumption progress has been relatively slow. Except for the robust demand in the automotive and home appliance sectors, steel demand in other sectors remains weak. Many steel mills have undertaken maintenance and cut production, leading to reduced steel mill production…

SMM, February 28: SMM communicated with some low-grade zinc oxide enterprises to understand the relevant situation and summarized the following reasons: Supply side, after the Chinese New Year, the resumption of work at end-users progressed relatively slowly. Except for the robust demand in the automotive and home appliance sectors, steel demand in other sectors remained weak. Many steel mills conducted maintenance and production cuts, leading to reduced steel production. The undersupply in the steel ash market made it difficult for low-grade zinc oxide manufacturers to maintain stable supply levels. Some low-grade zinc oxide enterprises also underwent maintenance and production halts during the Chinese New Year. Moreover, as the primary raw material for low-grade zinc oxide, steel ash prices remained high. However, according to SMM, imported low-grade zinc oxide has somewhat alleviated the tight supply situation, weakening the price support for low-grade zinc oxide. Demand side, according to SMM, after the Chinese New Year, zinc concentrate TC continued to rise, zinc ore supply gradually loosened, and smelters had sufficient raw materials, leading to a decline in demand for low-grade zinc oxide. The weakened demand caused the low-grade zinc oxide coefficient to decline, but the tight raw material supply kept low-grade zinc oxide prices relatively stable. Looking ahead, recent crude zinc sales have been strong, with robust orders. This is mainly because many zinc oxide manufacturers found it challenging to procure zinc slag due to its high coefficient. Comparatively, crude zinc prices were more favorable, prompting a shift to large-scale crude zinc procurement for production. The improved demand for crude zinc has increased the demand for low-grade zinc oxide. However, the tight raw material supply situation may not be resolved in the short term, suggesting an upward trend in the low-grade zinc oxide coefficient in the future.

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