SHANGHAI, Jan 25 (SMM)—According to SMM survey of 33 galvanising producers with a total production capacity of 21.85 million mt/yr and zinc consumption totalling 42,733.2 mt, zinc consumption of the galvanised structural parts is likely to stand at 94,647 mt during the Chinese New Year holidays.

Large enterprises are concentrated in north China, and their holidays are delayed compared to the previous survey data. The holidays will begin after February. Some enterprises remained high operating rates to support zinc consumption in north China before the CNY holidays. After the prices fell, companies were more willing to restock, and they have restocked about 10-15 days of  raw material inventories.

The holiday period for small and medium-sized enterprises was earlier than in previous years, and production is likely to suspend in late January. South China has advised workers not to travel home but to have their CNY holidays in their workplaces amid the Covid-19 situation, but workers are more eager to return to their hometowns for their long holidays.  The impact of the pandemic in east China was relatively small, and a small number of companies said that they will stick to the national statutory holidays schedules and will not go on holidays earlier. The situation showed that the overall holiday time in east China was later and shorter than that in north China.

There are 24 die-casting zinc alloy producers who have taken part in the survey, with a total production capacity of 722,800 mt/year, affecting 45,368.7mt of zinc consumption. According to calculations, it is estimated that zinc consumption of the die-casting zinc alloy sector stood at 101,844 mt during the CNY holidays. East China Die-casting Zinc Alloy Survey: Small factories will be away for holidays from January 20 to 28. Holidays for medium and large factories are from January 29 to February 6, and some will resume operations from February 18 till after February 26. End-users such as hardware, accessories and zips have been away for early CNY holidays, so the overall output of the alloy plant has declined. Downstream buyers restocked as zinc prices fell. In addition, individual factories are worried about whether workers will return on time after the holidays, so they produced finished products for sale after the holidays.

South China die-casting Zinc Alloy Survey: Small factories began to take holidays, medium and large factories will be on holiday from January 26, and some factories will be on holiday from February 4-7. The terminal sub-sectors have started to have holidays one after another. It is said that some sanitary ware factories only have a three-day holiday amid bullish overseas orders. Alloy plants restocked cargoes before the holidays as zinc prices declined. Some factories went to work on February 18. In the early stage, they mainly consumed finished product inventories. Workers will mostly be back to work on February 27.

There are 23 zinc oxide producers who have taken part in SMM’s survey, with total production capacity of 394,000 mt/year, affecting 3611.4 mt of zinc consumption. According to calculations, it is estimated that zinc consumption of the zinc oxide sector stood at 8,625 mt during the CNY holidays. Enterprises in Shandong were not affected by the pandemic and maintained their normal holiday arrangements. Companies in Jiangsu will have holidays from the end of January to the beginning of February. Hebei has been greatly affected by the pandemic, and companies have already stopped production in mid-January.

From January to February, the three major downstream zinc consumption sectors affected a total of approximately 205,100 mt of zinc consumption. Zinc consumption decreased by about 16,100 mt in January, and consumption in January is expected to be 618,700 mt. Zinc consumption decreased by 189,000 mt in February, and consumption in February is expected to be 429,700 mt, up 136,300 mt or 46.44% year-on-year.

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