SHANGHAI, Jul. 27 (SMM) – Average operating rate at die-casting zinc alloy producers in China’s Wenzhou should fall 1.32 percentage points in July due to environmental issues and off-season, SMM expects.
The majority of medium and small hardware plants, whose environmental equipment is not qualified, are forced to shut down due to the upcoming G20 Summit to be held in Hangzhou in September. This drags down orders for die-casting zinc alloy producers.
The hardware industry enters off-season in July-August. Wenzhou is the production base of metal shells used in lighters, razors and locks. In July, producers start conducting maintenance with hot weather and foreign trade also enters low season due to summer holidays in foreign countries. Consequently, orders for locks, razors and lights weaken.
Zinc prices continue gains while secondary zinc prices post limited growth. Price gap between #0 zinc and zinc slag expanded to above 3,000 yuan per tonne in mid-to-late June. Some die-casting producers thus more favor secondary zinc to cut costs, reducing demand for zinc ingots.
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