End-use consumption is relatively weak, and the operation rate of die-casting zinc alloy declines [SMM Die-Casting Zinc Alloy Weekly Review]

This week, the operating rate of the die-casting zinc alloy industry was recorded at 47.78%, down 2.5 percentage points WoW. On the inventory side, the zinc price center continued to move up this week, significantly cooling the procurement and cargo pick-up willingness of die-casting alloy plants and downstream hardware end-users. The market mainly focused on digesting their own inventories. Affected by this, raw material inventories at alloy enterprises continued destocking, while finished product inventories accumulated simultaneously. The decline in the operating rate this week was mainly dragged by weaker end-use consumption, along with a slowdown in manufacturers' export pace, a buildup of finished product inventories, and enterprises' downward adjustments to production loads. By downstream segment, the market is currently in the traditional consumption off-season, with orders across all sectors showing weakness: June automobile production and sales turned weaker YoY, while real estate-related supporting data remained sluggish. The two core consumption segments of die-casting zinc alloy provided insufficient support. Although demand from the electronics sector showed some resilience, its market share is low, making it difficult to offset the overall demand shortfall. Looking ahead to next week, demand in the off-season is unlikely to see significant recovery. Additionally, east China coastal areas are expected to be hit by a typhoon, posing a risk of temporary production halts for some enterprises. The die-casting zinc alloy operating rate is expected to pull back further to 47.73%.