End-Use Consumption Off-Season Characteristics Obvious, Zinc Oxide Operating Rate Weakens YoY [SMM Zinc Oxide Weekly Review]

The zinc oxide industry operating rate registered 54.61% this week, down 0.15 ppts WoW. Inventory side, finished product warehouse withdrawals continued to slow down as the end-use market was weighed down by the traditional consumption off-season, and finished product inventories were basically flat from last week. Raw material side, with zinc prices fluctuating at highs compounded by weakening downstream demand, producers' restocking enthusiasm cooled, and raw material inventories pulled back WoW. The decline in operating rate this week was mainly due to the current slowdown in end-use demand, with some enterprises engaging in production controls, which dragged down industry operating levels. End-use demand side, sluggish hog market conditions, together with the industry off-season, kept feed-grade zinc oxide purchasing demand significantly weak. In the rubber sector, constrained by high temperatures and weakening orders from tyre factories, rubber-grade zinc oxide demand showed mediocre performance. For electronic-grade zinc oxide, varistor-related orders contracted recently, and electronic-grade zinc oxide demand also experienced a certain slowdown. Looking ahead to next week, the zinc oxide operating rate is expected to continue to decline to fluctuate around 54.2% under the influence of demand.