SMM 2017 Lead & Zinc Summit: Outlook of Zinc Downstream Industries

SHANGHAI, May 22 (SMM) - SMM interviews industry insiders about their takes on the outlook for zinc downstream industries in 2017.

SMM: What do you think of downstream demand in 2017?

“We did not undertake onsite survey, but consumption is not as weak as we expected early this year based on current spot sales,” said one large lead and zinc traders from East China. The supply side started destocking, but the achievement of stock depletion will depend on the demand side. Enterprises hope demand will be as strong as last year’s, which will help smoothly realizing destocking.

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SMM: How is the development room and what bottlenecks will be for zinc oxide produced with zinc slag?

Secondary zinc prices rose rapidly this year, especially in North China market, said Chu Daxing, General Manager of U.S. Zinc. But they cannot bear higher prices for scrap, and may use crude zinc or zinc ingot should scrap prices rise further.

Low-end market still has thin processing fees, and with fierce competition, including direct and indirect zinc oxide. The whole industry lacks a leading company which has efficiency, high recycling ratio and high technology.

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SMM: What do you think of tire orders this year?

Tire demand from the automobile sector is steady with growth between 5-6%, said Chu Daxing. Demand driven by rapid development of new energy vehicle is very promising. But zinc oxide demand from the tire sector has been significantly hurt due to countervailing tax imposed on exported goods by other countries. US domestic industrial recovery will gather pace after Trump took office. This looks set to further impact China’s tire producers.

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