Zinc Oxide Operating Rates Slightly Rise, but Supply-Demand Risks Remain [SMM Zinc Oxide Weekly Review]

SMM November 21 News:

       The operating rate for zinc oxide this week was 57.25%, up 0.94 percentage points WoW. Raw material side, although zinc prices pulled back this week, some raw material prices remained relatively high. Coupled with slowing end-use demand in certain sectors, enterprises maintained just-in-time procurement, and raw material inventory changes were relatively small. Finished product inventories saw a slight decline as some end-users increased their cargo pick-up pace during the week. Although the zinc oxide operating rate rose slightly this week driven by production increases at some enterprises, there are still certain risks in subsequent market demand. In terms of end-use orders, some enterprises reported that demand for rubber-grade zinc oxide from tyre factories slowed recently, while demand for varistors in the electronic-grade zinc oxide sector also weakened. Enterprises reported a recent reduction in export orders. In addition, low-grade zinc oxide payables remained high recently, maintaining procurement pressure on zinc oxide enterprises in the market. Looking ahead to next week, with no significant bright spots expected in market demand, the zinc oxide operating rate is expected to hover slightly lower, around 57.13%.