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New Round of Price Hike Likely to Sweep the Zinc Alloy Sector

iconSep 7, 2021 18:50
Source:SMM
Production costs of die-casting alloy enterprises continued to climb due to rising raw material prices, creating great pressures to daily production and operation. As such, zinc die-casting alloy enterprises have started to consider lifting processing fees.

SHANGHAI, Sep 7 (SMM) - Production costs of die-casting alloy enterprises continued to climb due to rising raw material prices, creating great pressures to daily production and operation. As such, zinc die-casting alloy enterprises have started to consider lifting processing fees.

Non-ferrous metal prices have all recorded new highs since this year like copper and aluminium, while zinc prices also remained. For example, copper prices surged from YTD low of 57,000 yuan/mt to the current 70,000 yuan/mt; aluminium prices jumped from 14,800 yuan/mt to 21,640 yuan/mt; zinc prices also climbed from 19,700 yuan/mt to 22,630 yuan/mt, up by 22.8%, 46.2%, and 14.9%, respectively.

At the same time, enterprises are facing problems such as rising environmental protection costs and natural gas prices. The rise in raw material prices has significantly increased the financial pressure on enterprises. While terminal enterprises, especially exporters, have seen a backlog of finished goods inventory due to tight shipping containers, which has deepened the pressure on business operations by defaulting on payments to casting zinc alloy enterprises when funds are occupied.

At present, zinc die-casting alloy enterprises are increasingly likely to raise prices because of the increasing cost pressure. Some of the companies that have bid for the state reserve of zinc ingots said that they still have no intention of raising prices for the time being as the procurement cost is lower than the market price. SMM believes that, in the current situation where the pressure of the alloy business is rising, more companies will choose to follow through by lifting processing fees to ease the current pressure, and the zinc die-casting alloy industry may set off a wave of price hikes.

zinc alloy

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