Average Operating Rate at Chinese Die-Casting Zinc Alloy Producers Falls to 45.6% in February

 

The rate was down 0.1% month-on-month according to the SMM survey of enterprises, mainly located in Shanghai, as well as Zhejiang, Jiangsu, Fujian, Guangdong, Shandong, and Henan provinces. 

 

Most die-casting zinc alloy enterprises suspended production for one week in February due to the Chinese New Year holiday, but since some producers did not resume production until the middle or late February, the average operating rate remained low. 

 

Compared to January, orders received by die-casting zinc alloy producers were up in February thanks to the arrival of strong demand period at zipper producers, and due to steady orders at hardware and sanitary equipment producers. Demand from automobile parts manufacturers was soft, however. 

According to China Association of Automobile Manufacturers, output of automobiles totaled 1.64 million vehicles in February, down 20.18% month-on-month, but up 21.53% year-on-year. Total sales were 1.59 million vehicles, down 25.97% month-on-month, but also up 17.84% year-on-year. The declines in vehicle output and sales dragged down demand for auto parts. 

 

The SMM survey also revealed that die-casting zinc alloy producers were generally producing on an as-needed basis following the Chinese New Year holiday. Most producers were pessimistic towards the near-term outlook, and were only keeping raw material stocks for 1-5 day’s of production. Other producers with strong order sheets were keeping stocks sufficient for 15- 30 day’s production. 

Since early March, most die-casting zinc alloy producers had returned to normal production and were reporting steady orders, so SMM expected the average operating rate for March to rise to 50%.