SHANGHAI, Aug. 14 (SMM) - SMM survey finds the average operating rate at 30 Chinese die-cast zinc alloy producers, with total capacity of 971,400-tpy, was 52.6 per cent in July, down 6.7 per cent on a monthly basis.
SMM survey shows approximately 57 per cent of the 30 companies surveyed reported falling orders, and following three factors explained the big drop in production in July.
First, zinc price kept trading at highs in July, and the SMM #0 zinc spot price gained 626 yuan on a monthly basis. The price rise reduced orders from end-users.
Second, summer heat negatively affected production at plants. Some producers shortened working hours in response to high temperature in July in east and south China, restricting production.
Third, orders from some end-user sectors are in off-demand season. Fujian Longyu Zinc Industry, Jinyi Alloy and Yiwu Lanbeisi Metal Product told SMM that orders from auto parts and electronics were stable, but those from locker, zipper, buckle and bathroom accessories were down sharply.
The producers in the survey also added that orders from bathroom accessories, toys, autos and parts will improve in late August. Meanwhile, production commissioning at Zhejiang Sigma after removal and returning of normal production at Qingdao Liangmao Metal Materials will also help increase production in August.
According to production plans, the average operating rate at Chinese die-cast zinc alloy producers is expected to rise slightly to 56.1 per cent in August, up 3.5 per cent on a monthly basis.
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