SMM, October 14:
In Q3, Secondary Zinc Oxide prices remained elevated amid a tug-of-war between raw material cost support and weak downstream demand. Tight steel ash supply pushed up raw material costs, while downstream buyers showed limited acceptance of high-priced material, restricting further price increases. How will Secondary Zinc Oxide prices perform in Q4?
In Q3, the Secondary Zinc Oxide market generally remained at elevated levels, with prices fluctuating within a narrow range and facing limited upside and downside potential. Weak demand for steel products led to lower steel production, reducing the output of steel ash and other raw materials. Supply remained tight, while rising coal and other energy costs further supported production costs. However, downstream buyers were reluctant to accept high-priced raw materials and mainly purchased according to immediate needs. Producers faced difficulties in passing higher costs through to downstream customers, keeping profit margins under pressure. With cost support and weak demand offsetting each other, prices remained elevated but largely stagnant.
Q4 Outlook: The Secondary Zinc Oxide market is expected to remain caught between supply-side cost support and weak downstream demand in Q4. On the raw material side, if steel production and steel ash supply fail to recover significantly, raw material availability is likely to remain tight. Combined with elevated production costs, this should continue to provide a solid floor for Secondary Zinc Oxide prices. On the demand side, downstream profitability and order conditions will remain key factors influencing purchasing activity. If end-user demand improves only modestly, downstream buyers are unlikely to become significantly more accepting of high-priced raw materials, limiting producers' ability to raise prices.
Overall, the Secondary Zinc Oxide market is expected to face both firm cost support and demand-side constraints in Q4. Tight raw material supply should limit downside potential, while weak downstream purchasing capacity will continue to restrict further price increases. Prices are therefore expected to remain at elevated levels and fluctuate within a high range. Market participants should pay close attention to changes in steel ash supply, raw material procurement costs, and the recovery of downstream orders.
