SHANGHAI, Jul. 17 (SMM) - The average operating rate at Chinese die-cast zinc alloy producers was only 50.5% in the first half of 2015, much lower than the 56.35% during the same period last year, SMM survey reports.
"The off-season falling in May and liquidity crunch are contributing factors of the sharp fall in production”, SMM zinc analyst explains.
Demand from end-users weakened. The automobile sector, the major end-user of die-cast zinc alloy, witnessed slower growth in production. Domestic automobile output and sales in the first half of this year were 12.10 million and 11.85 million vehicles, respectively, up 2.64% and 1.43% YoY, with the growth down 6.96 percentage points and 6.93 percentage points from the same period last year.
Orders from other end-users, including costume, electronics and property, also decreased sharply.
The costume and electronics sectors reported slide in export orders, with a 1.96% YoY drop at electronics producers between January and May and a 3.6% YoY fall in costume export value the same period.
Cash tightness at end-users also prevented them from buying raw materials in mid and late June, also allowing die-cast zinc alloy production to fall. Some bathroom accessory manufacturers in Guangdong were even forced to shut down, SMM reports.
Operating rates at die-cast zinc alloy producers will continue to slide in July, SMM predicts.
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