Average Operating Rate at Chinese Die-casting Zinc Alloy Producers Edges Up in November

Shanghai Metals Market surveyed major die-casting zinc alloy producers in Shanghai, Zhejiang, Jiangsu, Fujian, Guangdong, and Shandong in November, finding that most of them saw little improvement in orders. 

 

As low demand season for home decoration set in, hardware and bathroom accessory makers consumed fewer die-casting zinc alloy in November, while consumption by zipper head producers remained stable. Auto parts makers showed robust demand for zinc alloy as both automobile output and sales hit record highs for the year. China Association of Automobile Manufacturers (CAAM) reported China’s automobile output was 2.13 million vehicles in November, up 11.39% on the month and 21.17% from a year ago. Automobile sales were 2.04 million vehicles, up 5.75% from October and 14.12% year-on-year. 

 

Most zinc alloy producers purchased raw materials only based on production needs in November, reluctant to build additional stocks due to year-end financial problems and high zinc prices. Some bargain hunters already stocked raw materials in large amounts early November when zinc prices dropped below 150,000 yuan per tonne. That, combined with adequate inventories held by most producers and price rebound lately, undermined buying interest. 

 

Zipper consumption was expected to remain stable in December. However, house construction might slow down and demand for indoor decoration would decline in winter, dampening consumption of hardware and bathroom accessories. Moreover, enterprises would shift their focus from production to destocking to generate cash by the year’s end. In this context, SMM expects average operating rate at die-casting zinc alloy producers to fall slightly in December.