SHANGHAI, Jun. 20 (SMM) – Average operating rate at Chinese die-cast zinc alloy producers fell 2.7% from April to 60.7% in May due to soft demand, Shanghai Metals Market survey found.
The drop in production was due largely to poor orders from bathroom accessory, lockset and handle sectors amid the sluggish property market, according to SMM survey of domestic die-cast zinc alloy makers in Shanghai, Zhejiang, Jiangsu, Fujian, Guangdong, Shandong, and Henan provinces.
Conditions in the automobile, fashion accessory, zipper head, and auto parts sectors were stable in May, leaving their demand stable, the SMM survey showed.
In June, the average operating rate at those surveyed producers is expected to fall further due to weak demand and negative impact on production from high summer temperatures, SMM foresees.
The SMM survey also revealed that 70% of surveyed producers cut inventories to only two days of production owing to market pessimism toward zinc prices. Some medium to large enterprises maintained inventories for 1-2 weeks of production, but plan to strictly monitor purchases if zinc prices remain high.