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[SMM analysis] Smelters added zinc alloy production lines, how can traditional zinc alloy enterprises survive?

iconApr 3, 2024 11:20
Source:SMM
Under the general trend of resource integration, smelters have gradually expanded their industrial lines, added die-cast zinc alloy processing production lines, and optimized production processes, effectively reducing costs compared to traditional zinc alloy manufacturers.

SHANGHAI, Apr 3 (SMM) - Under the general trend of resource integration, smelters have gradually expanded their industrial lines, added die-cast zinc alloy processing production lines, and optimized production processes, effectively reducing costs compared to traditional zinc alloy manufacturers. In 2021, smelters’ total output of die-cast zinc alloys was 151,200 tons, and the total output in 2022 was 125,700 tons and 182,900 tons in 2023. Excluding the impact of the COVID-19 pandemic, smelters’ related production is increasing, while the operating rate of traditional zinc alloy manufacturers is declining year by year. So where is the current way for traditional zinc alloy manufacturers to survive?

The SMM survey and analysis are as follows, including but not limited to the following two points:

R&D sales team

At present, smelters mainly produce traditional national standard die-cast zinc alloy ingots, which mainly occupy the market with large quantities, stability and relatively favorable prices. They are relatively weak in customization. However, the market currently has more requirements for zinc alloys, and in different consumer application fields, there are slight differences in the specifications of zinc alloys. Some companies have focused on this breakthrough point, expanded their research teams, refined their positioning of customer needs, and optimized the proportion of metal components in die-cast zinc alloys to meet demand, while reducing costs in the process of achieving quality optimization.

High-quality customer groups

According to the current business scope of the smelters, they rely heavily on a large sales team and customer base, so they are currently very dependent on traders. At present, traditional die-casting zinc alloy manufacturers basically have their own stable customer base. Through long-term cooperation and screening, customer stability and mutual familiarity are relatively high. At present, high-quality customers have a good performance in orders from traditional die-casting zinc alloy manufacturers.

In the short term, there is still a large space for traditional die-casting zinc alloy manufacturing companies in the market, but the process of resource integration will inevitably compress the survival space of the traditional die-casting manufacturing industry. Some traditional die-casting zinc alloy companies have turned into traders.

Market review

For queries, please contact Michael Jiang at michaeljiang@smm.cn

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