Zinc Oxide Operating Rates Rise, but Downstream Market Risks Remain [SMM Zinc Oxide Weekly Review]

This week, the zinc oxide operating rate was recorded at 55.71%, up 1.82 percentage points WoW. On the inventory side, zinc prices continued to rise, putting raw material costs for zinc oxide enterprises under pressure. Purchases turned cautious, and raw material inventory pulled back. The rebound in operating rates this week was mainly driven by gradual production ramp-ups and capacity release at some large plants. However, rising raw material prices pushed up production costs, prompting some direct-process zinc oxide producers to slow their production pace. Meanwhile, small and medium-sized zinc oxide enterprises were squeezed by high raw material prices, with sluggish shipments dragging down the overall operating rate. From the end-use demand side, orders at large plants remained relatively stable overall, with some enterprises reporting improving demand for feed-grade zinc oxide recently. Looking ahead to next week, zinc oxide enterprise operating rates are expected to fluctuate around 55.79%.