SHANGHAI, Mar 18 (SMM) — Operating rates at die-casting zinc alloy enterprises in February was 14.72%, 30.21 percentage points lower from the previous month and an increase of 3.38 percentage points on the year, according to SMM's survey of 66 producers with 1.61 million mt of capacity. Operating rates in February fell 42.2% month-on-month to 19.76%. Downstream plants began CNY holidays in late January, and resumed operations on February 18. However, there was still finished products consumption and demand was weak initially post-holiday, which dragged down the operating rate in February. The downstream resumption of work was delayed by 7-40 days last year due to the Covid-19 pandemic in February 2020. End-users resumed work, and restocking demand rose after declining and demand will improve in March, which will slightly support the operating rates.

Die-casting zinc alloy processing fees remained stable, especially when prices of aluminium ingots have risen sharply. The price spread between zinc and aluminium narrowed, and prices of copper rose sharply, resulting in shrinking of corporate processing profits and sellers were unwilling to lower prices. Mainstream quotes for #3 zinc alloy in east China stood at 400-600 yuan/mt, #5 zinc alloy stood at 750-950 yuan/mt; #3 zinc alloy at 450-650 yuan/mt and #5 zinc alloy 800-1,000 yuan/mt in Guangdong. Die-casting alloy plants restocked as zinc prices fell. Inventory days of raw materials was lesser in February amid consumption in early February. Demand will continue to improve in March amid traditional peak season for die-casting zinc alloy sector, with normal operations across end-users. In addition, demand for locks, electronic equipment, door and window hardware accessories, and auto parts is also recovering. Exports of sanitary ware, electronics, valves, toys and zip were modest. Operating rates at original sample producers are likely to stand at 46.96% in March, up 32.24% on the month and 1.8% on the year while new sample plants to rise 48.27% month-on-month to 68.03%.