Year-End Approaching: How Has Recent Zinc Downstream Consumption Performed? [SMM Analysis]

Recently, zinc prices have remained at high levels. In November, zinc downstream consumption was resilient, but as the year-end approaches, operating rates in some downstream sectors have started to pull back. Specifically, demand for galvanized pipes has declined due to colder weather, and coupled with high raw material costs, some small factories have opted to reduce their operating rates, leading to a drop in galvanizing operating rates last week. Die-casting zinc alloy enterprises have similarly reported weaker orders, with some large factories undergoing maintenance recently, resulting in lower operating rates as well. Meanwhile, year-end stockpiling orders from multiple end-user enterprises have continued to grow, keeping zinc oxide operating rates resilient last week. However, as stockpiling orders are gradually fulfilled, operating rates are also expected to pull back subsequently. Overall, the off-season consumption trend for December is becoming increasingly evident, and with end-users gradually weakening, downstream operating rates are expected to continue declining.