Production at zinc oxide enterprises diverged amid environmental restrictions

SHANGHAI, Apr 1 (SMM) – Traded prices of zinc oxide stood at 20500-21400 yuan/mt last week. Output at zinc oxide enterprises in north China has declined last week due to environmental restrictions, and production has diverged. Since the beginning of the year, zinc prices were high and fluctuated largely. Zinc oxide companies have increased product prices. Downstream companies have gradually accepted such price hike. Orders at producers recovered and the capacity utilisation rate improved further. However, major plants in Hebei and Inner Mongolia have begun to suspend or reduce production due to the environmental restrictions, pressuring on the operating rates at zinc oxide plants. On the consumer side, pre-restocking till end-March by auto companies have almost run out. As demand rose, auto makers increased orders for zinc oxide. Orders in the electronics industry have gradually recovered since the resumption of work after the holiday. Orders were basically normal two weeks after the holiday, and demand recovered quickly. Orders from pharmaceutical sector have also returned to normal level. Overall, the downstream consumption of zinc oxide has gradually recovered. However, output of zinc oxide fell 5% due to the environmental restrictions in north China.