SHANGHAI, May 15 (SMM) - The average operating rate of zinc oxide enterprises in SMM’s old survey sample was 42.66% in April, down 1.57 percentage points month on month, but up 3.4 percentage points year on year. The average operating rate in SMM’s new sample was 47.18% in April, a drop of 2.8 percentage points MoM.
As zinc prices kept falling, galvanising enterprises were reluctant to lower the price coefficient of their zinc slags. Bearish stance over zinc prices deterred zinc oxide producers from stocking up. In response to tight zinc slag supply, most zinc oxide producers purchased zinc ingots for production instead. Falling zinc prices also weighed on zinc oxide prices, eroding producers’ profits.
Hog production in north China continued to fall in April due to hog cholera and low prices, thus demand for feed-grade zinc oxide was poor. Semi-steel tyre plants maintained high operating rates, ensuring stable demand for zinc oxide. However, bearish sentiment towards zinc prices kept tyre plants cautious about purchasing.
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