Slight growth in Aug operating rate at zinc alloy producers

SHANGHAI, Aug 31 (SMM) – The operating rate across Chinese manufacturers of zinc alloy and die-castings grew slightly in August as production recovery in Guangdong was mostly offset by weakening demand from end-users and production cuts or suspension in Jiangsu and Zhejiang, SMM research found.

The rate came in at 50.43%, up 2 percentage points month on month and 7.57 percentage points year on year, SMM data showed.

August output of zinc alloy and die-castings in Guangdong province grew nearly 1,000 mt from July as manufacturers gradually recovered production after environmental inspectors left.

Meanwhile, some manufacturers in Jiangsu and Zhejiang provinces were required to cut or cease production as they failed to pass environmental checks.

Some manufacturers told SMM that orders from end-users including furniture, sanitary ware and hardware sectors sharply shrank as the US-China trade dispute escalated.

SMM expects the operating rate across Chinese manufacturers of zinc alloy and die-castings to extend its gains next month as the traditional high season of September-October arrives. Potential environmental probes are likely to limit growth.

The rate is expected to increase 0.46 percentage point from a month ago to 50.89% in September, and stand 3.71 percentage points lower than the same period last year, SMM estimated on production plans across manufacturers.