Zinc Price Rally Suppressed Downstream Demand, Die-Casting Zinc Alloy Operating Rates Declined This Week [SMM Die-Casting Zinc Alloy Weekly Review]

SMM Oct. 24:

      The operating rate of die-casting zinc alloy recorded 53.13% this week, down 1.51 percentage points WoW. Raw material side, zinc prices' center moved higher overall this week, and downstream mainly made just-in-time procurement. However, some enterprises received early deliveries of next month's long-term contracts this week, coupled with continuous withdrawals of previously booked low-priced goods during the week, which drove a slight increase in inventory. Finished product inventories side, as enterprises' shipment pace slowed down this week, finished product inventories increased slightly. The decline in this week's operating rate was mainly due to weaker end-use demand during the week, leading to an overall drop in production. Regarding end-user orders, according to enterprise feedback, current downstream demand is relatively weak overall. Traditional hardware orders, such as those for bag zippers, small ornaments, and medals, were in the doldrums, while real estate hardware orders also showed generally weak demand. Recently, affected by aluminum and copper prices, alloy profit support was insufficient, leading some enterprises to raise alloy processing fees. Under this influence, downstream also exhibited some wait-and-see sentiment, primarily making just-in-time procurement. Looking ahead to next week, some enterprises plan to take holidays to digest in-factory inventory, so the operating rate of die-casting zinc alloy is expected to continue declining and hover around 50.91%.