Zinc Prices "Swinging" - How Far Along Is the Progress Bar for the Resumption of Die-Casting Zinc Alloy Sectors? [SMM Analysis]

SMM February 21 News:

According to reports, most die-casting zinc alloy enterprises took their holidays around mid-to-late January, with a few starting their holidays on the day before the Chinese New Year. The resumption of work was mainly concentrated around the Lantern Festival, with an average holiday duration of approximately 22 days. So, what is the current end-use consumption situation for die-casting zinc alloy? The following analysis will focus on the real estate sector, automotive parts sector, luggage and zipper hardware sector, and export orders.

Real Estate Sector: As the largest downstream segment of die-casting zinc alloy, the sluggish development of the real estate sector has led to no significant improvement in downstream orders. After the Chinese New Year holiday, domestic zinc prices showed a general trend of fluctuation. Some large manufacturers reported that orders for hardware and sanitary ware, as well as furniture accessories, were relatively average, generally in a gradual recovery state. During this off-season for such orders, downstream end-users mostly opted for small-scale restocking, while the recent surge in zinc prices further weakened procurement demand. Enterprises are pinning their hopes on March, believing that with warmer weather and the recovery of downstream consumption, such orders will gradually improve.

Automotive Parts Sector: According to feedback from enterprises, orders in the automotive parts sector are also in a gradual recovery state. In December last year, China's cumulative automobile production reached 31.282 million units, up 3.7% YoY, while cumulative sales reached 31.436 million units, up 4.5% YoY. From the perspective of end-user orders, some Guangdong enterprises reported that orders in the NEV sector showed strong momentum before the holiday, and after the holiday, automotive parts orders also remained relatively stable overall. However, downstream consumption has not yet fully returned to normal.

Luggage and Zipper Sector: Regarding luggage and zipper orders, some enterprises reported that due to the relatively low zinc prices before the holiday, coupled with the postponement of the consumption peak season due to weather conditions, order volumes experienced a small peak. After the holiday, there were still cases of continuing production for pre-holiday orders. Additionally, a few enterprises noted that orders in this sector during January-February were overall better than the same period last year. With March approaching, the peak season for zipper orders is also gradually nearing, and enterprises hold optimistic expectations for the future.

Export Sector: According to enterprise feedback, export orders are currently performing poorly overall. Due to a "rush to export" before the holiday caused by tariff issues, foreign traders now have high inventory levels, leading to weak procurement demand. Meanwhile, with the implementation of Trump's tariff policies, some enterprises primarily focused on export orders are considering setting up factories in Southeast Asia. However, the impact of reciprocal tariffs on such export orders remains unpredictable. Overall, export orders are currently underperforming, and enterprises believe that the future development of this segment is filled with uncertainties.

In Summary, orders across various segments of die-casting zinc alloy are currently in a recovery phase. However, the recent rebound in zinc price centers has suppressed some downstream procurement sentiment. Although the current recovery in downstream consumption is not as strong as expected, enterprises remain optimistic about future consumption as time progresses and downstream consumption gradually improves.

                                                                                                                                                    》Click to View the SMM Metal Industry Chain Database