Lower demand cuts Sep's operating rate at zinc alloy producers

SHANGHAI, Oct 12 (SMM) – THe operating rate across Chinese manufacturers of zinc alloy and die-castings fell in September as rising zinc prices and a trade war dispute weakened downstream demand. 

The rate came in at 48.15%, down 2.29 percentage points from August and down 6.45 percentage points from a year ago, SMM data showed.

Overseas orders from the US and Turkey slid across the downstream hardware, sanitation, and furniture sectors, on global trade dispute. This weighed on overall demand for die-casting zinc alloy, from a year ago. High zinc prices in September also depressed production enthusiasm across downstream plants. 

Orders from auto and apparel sectors improved in September but failed to offset the negative impact on consumption. 

SMM expects the operating rate to extend its decline in October as most zinc alloy and die-castings plants scheduled long breaks during the National Day holiday. 

The rate is likely to fall 2.55 percentage points from September to 45.6% in October, and stand 7.4 percentage points lower than the same period last year, SMM estimated on production plans across manufacturers.