High Zinc Prices Weigh on Die-Casting Operating Rates [SMM Die-Casting Zinc Alloy Weekly Review]

This week, the operating rate of die-casting zinc alloy enterprises came in at 50.75%, edging down 2.66 percentage points WoW. On the inventory side, the center of zinc prices continued to rise this week, and the high-price environment weighed on downstream purchase sentiment. Procurement enthusiasm among die-casting zinc alloy enterprises declined notably, with most opting to draw down existing stock rather than actively restock, while raw material inventories fell. End-user purchase pace slowed to an as-needed basis, increasing shipment resistance for alloy producers. Combined with insufficient demand support, finished product inventories stayed high. Overall production pace in the industry edged down slightly this week, primarily due to recent elevated prices, sluggish shipments from alloy producers, and a slowdown in production pace. Order divergence across end-user segments persisted — electronics-related orders maintained their previous steady momentum, auto parts orders remained stable, while demand for traditional categories such as daily hardware and crafts was relatively weak. Constrained by rising raw material prices, overall wait-and-see sentiment among end-users remained strong. Looking ahead to next week, if zinc prices continue to fluctuate at highs, downstream wait-and-see sentiment is expected to be difficult to ease in the short term, pre-holiday stockpiling activity is likely to be relatively limited, and the die-casting zinc alloy operating rate is expected to move sideways around 51.34%.