Operating rates at zinc oxide plants to dip in May

SHANGHAI, May 21 (SMM) – Operating rates across China's zinc oxide plants are likely to dip in May, an SMM survey showed. 

This is due to the month-long environmental inspections in Jiangsu province since late April, and intensified inspections ahead of the Shanghai Cooperation Organisation (SCO) Summit in Qingdao, Shandong province, in June.

Hebei and Jiangsu border Shandong in the north and south, respectively. Most of China's zinc oxide production is located in these three provinces and account for more than half of China's capacity.

Operating rates across zinc oxide producers in April stood at 57.1%, up 3.7 percentage points from March and flat from the same period in 2017. The rise was a result of most plants resuming operations after environmental restrictions in north China, and April's robust downstream demand from the car industry.

China's vehicle sales reached 2.32 million units in April, up 11.5% from a year ago. This brought the January-April vehicle sales to 9.5 million units, up 4.8% year on year, according to data from the China Association of Automobile Manufacturers (CAAM). 

The vehicle production stood at 2.4 million units last month, up 12.3% on the year. In the first four months of this year, total vehicle output amounted to 9.42 million units, up 1.8% year on year, CAAM data showed. 

Zinc oxide is used to produce rubber compounding, which is the single largest end use, and is driven largely by automotive markets, or more specifically tires, belts, hoses, and others.

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