The consumption of die-casting zinc alloy had both joys and sorrows in the "first half". How will the consumption trend be in H2? [SMM Analysis]

SMM July 14th News:

As 2025 has passed halfway, how was the consumption of die-casting zinc alloy in China during the first half of the year? And how will it develop in the future?

From the perspective of the overall operating situation in the first half of the year, except for January when enterprises were on holiday due to the Chinese New Year, the operating rate of die-casting zinc alloy increased YoY from February to May, and slightly decreased YoY in June. The following analysis will be conducted based on different sectors.

Firstly, from the perspective of the real estate sector, the cumulative YoY sales area of commercial housing in China from January to May was -2.9%, and the cumulative YoY completion area was -17.3%. Among them, the sales area of commercial housing narrowed from -5.1% in January to -2.9%, and the completion area of commercial housing expanded from -15.6% in January to -17.3% in May. The overall performance of real estate data remained relatively average, with YoY figures still recording negative values. Meanwhile, according to the overall feedback from enterprises, there were no significant consumption highlights in the hardware consumption sector of China's real estate industry in the first half of the year.

Secondly, from the perspective of the automotive sector, China's cumulative automotive production reached 12.827 million units and cumulative sales reached 12.746 million units from January to May, with cumulative YoY figures of 12.7% and 10.9% respectively. Among them, the production and sales of NEVs reached 5.701 million units and 5.606 million units respectively from January to May, with cumulative YoY figures of 45.3% and 44.7% respectively. The automotive production and sales data were relatively impressive, but still showed a downward trend YoY in the first half of the year.

Furthermore, from the perspective of the home appliance sector, statistics show that the cumulative YoY figures for air conditioners, refrigerators, and washing machines in China from January to May were 1.6%, -1.5%, and 9.3% respectively. Although the data for the home appliance sector has shown a downward trend recently and the refrigerator sector has been in the doldrums, driven by the overall performance of air conditioners and washing machines, the home appliance sector still provided certain support for the consumption of die-casting zinc alloy, playing a supporting and driving role in the consumption of die-casting zinc alloy in China during the first half of the year.

In terms of export orders, China's cumulative exports of die-casting zinc alloy reached 2,357.65 mt from January to May, with a cumulative YoY increase of 24.48%. From the perspective of cumulative monthly data, China's cumulative exports of die-casting zinc alloy reached 46.07%, 37.89%, 11.77%, 101.32%, and 24.28% respectively from January to May. In April, Taiwan, China alone drove China's die-casting zinc alloy exports to a new high in a decade. Under the tariff threat from Trump, there was a significant "rush to export" of die-casting zinc alloy in China during the first half of the year.

Supported by the automotive, home appliance, and export sectors, the operating rates of China's die-casting zinc alloy industry improved YoY in H1. Looking ahead, how will the consumption of China's die-casting zinc alloy industry develop in H2?

First, from the perspective of domestic policies:

On June 24, the People's Bank of China, the National Development and Reform Commission (NDRC), and four other departments jointly issued the "Guidance on Financial Support for Boosting and Expanding Consumption," proposing 19 key measures in six areas. The aim is to strengthen support and cultivation for key consumption areas from both the supply and demand sides of consumption.

On June 26, Li Chao, Deputy Director of the Policy Research Office of the NDRC, stated that the third batch of trade-in funds for consumer goods this year would be allocated in July. Excluding the 162 billion yuan already allocated in Q1 and Q2, the remaining third batch of funds, totaling 138 billion yuan, would be allocated in batches in Q3 and Q4.

Strong policy support is expected to provide certain support and drive for the consumption of China's die-casting zinc alloy automotive parts and home appliance sectors. Subsequent attention can be paid to the specific demand performance in the market.

Secondly, from the perspective of tariffs and exports:

According to the "Joint Statement of the China-US Geneva Economic and Trade Talks," the China-US tariff agreement has a duration of 90 days, starting from May 14, 2025, to August 12. Meanwhile, US President Trump announced that new tariffs would be imposed on a series of countries, including Japan and South Korea, on August 1.After the expiration of the agreement, the export situation of China's die-casting zinc alloy and its end-use products remains unclear.However, from the perspective of recent overall export orders, export orders for China's die-casting zinc alloy end-use products have weakened. Meanwhile,many countries in Europe and the US plan to have summer vacations from July to August, and the demand for die-casting zinc alloy in overseas markets is expected to weaken accordingly.

Finally, from the perspective of corporate attitudes:

Currently, many enterprises in the market believe that Q3 consumption has been brought forward to H1. Therefore, many enterprises have a relatively negative attitude towards overall Q3 consumption and are cautious about Q4 consumption.

In summary, although domestic favorable policies provide certain room for upward consumption in H2, given the uncertainty of tariffs and cautious corporate attitudes, it is expected that consumption in China's die-casting zinc alloy market will continue to weaken in Q3 and may recover somewhat in Q4.

(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and not rely on this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.)

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