Downstream Sector Demand Weakens, Zinc Oxide Operating Rates Decline [SMM Zinc Oxide Weekly Review]

SMM November 7 News:

       This week, the operating rate for zinc oxide was 57.63%, down 0.56 percentage points WoW. Inventory side, zinc prices rose this week, coupled with some recycled raw material prices remaining relatively high, leading to significant procurement pressure for enterprises, resulting in a decline in raw material inventories. Finished product inventories side, demand from some downstream sectors weakened recently, causing a slowdown in the pace of warehouse withdrawals for enterprises, and finished product inventories increased. Current market demand is relatively average, hence the slight decline in the zinc oxide operating rate this week. In terms of end-use orders, demand for ceramic-grade zinc oxide was in the doldrums recently; affected by the sluggish real estate market, end-use orders for ceramic-grade zinc oxide were poor, and market demand is expected to continue weakening subsequently. The rubber-grade zinc oxide and feed-grade zinc oxide sectors overall remained relatively normal. Recently, due to weather impacts in north China, some galvanizing enterprises implemented production cuts, but this had no substantial impact on production for zinc oxide enterprises. Looking ahead to next week, under the influence of high raw material prices and weak end-use demand in some sectors, the zinc oxide operating rate is expected to hover around 57.94%.