Some enterprises were constrained by environmental protection-driven production restrictions, and zinc oxide operating rates continued to decline this week [SMM Zinc Oxide Weekly Review].

SMM News on November 7:

       This week, the operating rate of zinc oxide recorded 56.31%, down 1.32 percentage points MoM. Raw material side, zinc prices maintained a fluctuating trend, and most enterprises made just-in-time procurement. Except for some enterprises receiving raw material shipments recently, most enterprises' raw material inventories remained generally stable. However, affected by the recent high price transmission, downstream wait-and-see sentiment was relatively strong, coupled with average market demand performance, leading to an increase in finished product inventories of enterprises. The decline in this week's operating rate was mainly due to slight production reductions in some northern enterprises constrained by environmental protection factors. From the perspective of end-user orders, procurement demand from tyre factories for rubber-grade zinc oxide remained relatively stable, and related orders could still maintain normal production. However, enterprises remained cautious about potential risks in subsequent tyre exports. Orders in other sectors showed no significant fluctuations this week. However, with colder weather, increasing environmental protection-driven production restrictions in the north, and weakening demand, the operating rate of the zinc oxide industry is expected to remain around 56.01% next week.