Slack demand, cash flow issues lower Dec operating rates at zinc alloy producers

SHANGHAI, Jan 11 (SMM) – Operating rates across Chinese manufacturers of zinc alloy and die-castings came in at 46.89% in December, down 3.14 percentage points from November and 5.37 percentage points from a year earlier, SMM data showed.

As SMM expected, rates fell in December as November’s order boom from cheaper zinc shrank December’s new orders for zinc alloy and die-castings.

The long payment period for manufacturers of zinc alloy and die-castings and year-end accounting exacerbated cash flows at some producers and affected operating rates.

End-market demand for hardware weakened last month. This lowered the operating rates across producers of zinc alloy and die-castings, even though the change of season boosted orders for zips.

The onset of CNY would prompt some end-users to stop purchasing after the middle of this month. This is set to lower the operating rates in January.

Production schedules showed that operating rates across Chinese manufacturers of zinc alloy and die-castings are likely to drop 13.08 percentage points month on month to stand at 33.8% in January, down 6.34 percentage points from a year ago.