High Prices Weigh on Downstream Demand, Downstream Consumption Lacks Highlights [SMM Zinc Oxide Weekly Review]

This week, the operating rate of zinc oxide enterprises was recorded at 59.96%, up 0.21 percentage points WoW. On the inventory side, suppressed by high prices, the raw material procurement pace of zinc oxide enterprises slowed down this week. Most enterprises in the market chose to consume existing inventories or make just-in-time procurement, leading to a decline in raw material inventory; finished product inventories edged up slightly. This week's operating rate was basically flat with last week's level, with large producers maintaining relatively stable operations overall. Some small enterprises saw a slight increase in production in May due to plans to ramp up output. Current actual market consumption showed mediocre performance, with no significant improvement in orders across segments. Affected by high prices, some enterprises reported that end-use demand showed signs of weakening within the week. Among them, feed-grade zinc oxide orders remained sluggish; the housing market performance weakened YoY, further dragging down related demand. Ceramic-grade zinc oxide also lacked highlights, with overall demand being mediocre. Looking ahead to next week, the operating rate of zinc oxide enterprises is expected to continue fluctuating around 59.89%.