Environmental protection checks continue, zinc oxide enterprises' operating rates decline [SMM Zinc Oxide Weekly Review]

SMM June 13 News:

     This week, the operating rate of zinc oxide enterprises was recorded at 58.92%, down 0.59% WoW. On the raw material side, the center of zinc prices moved downward this week, prompting some zinc oxide enterprises to conduct a small amount of restocking at lower prices. Consequently, raw material inventories increased WoW. In terms of finished product inventories, downstream purchases increased driven by lower prices during the week, leading to a decrease in finished product inventories of zinc oxide enterprises. Additionally, some enterprises recently reduced their output due to the impact of environmental protection checks. Regarding terminal order performance, tire orders for rubber-grade zinc oxide still show significant differentiation. Orders exported to the Middle East region are weak, while other orders are relatively normal. However, after entering the off-season for consumption, terminal tire demand is expected to be in the doldrums. For feed-grade zinc oxide, market demand has weakened due to the impact of hog prices. There have been no significant changes in orders for ceramic-grade and electronic-grade zinc oxide. Recently, affected by environmental protection checks, some zinc oxide enterprises in Ningxia and Shanxi have entered a state of shutdown or production cuts. Meanwhile, downstream consumption is gradually entering the seasonal off-season. It is expected that the operating rate of zinc oxide enterprises will remain around 58.99% next week.

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