Resumption of Production by Enterprises Drives Up Die-Casting Operating Rates, but Market Demand Remains Relatively Mediocre [SMM Die-Casting Zinc Alloy Weekly Review]

SMM Nov. 14:

      The operating rate for die-casting zinc alloy recorded 51.02% this week, up 0.72 percentage points WoW. Inventory side, zinc prices pulled back recently, prompting die-casting zinc alloy enterprises to restock at low levels, driving up raw material inventories. Finished product inventories, as downstream end-users also showed restocking interest at low prices, some die-casting zinc alloy enterprises saw improved shipments early in the week. However, as zinc prices fluctuated, the shipment pace slowed down, and finished product inventories only saw a relatively small decline. The rise in the die-casting zinc alloy operating rate this week was mainly due to production resumptions at some enterprises boosting output. But actual consumption in the alloy market remained mediocre, and some enterprises halted production and shifted to trading due to factors like recent raw material cost pressure. Specific production resumptions will depend on subsequent price spread opportunities between raw and auxiliary materials. Looking at end-user orders, traditional hardware consumption in real estate is currently mediocre, with weak performance in locks and furniture fittings. However, electronics orders showed relatively good overall demand. Yet, due to the relatively small proportion of this terminal segment and low alloy usage, its driving force on the alloy market remains limited. Next week, amid weakening demand and the trend of small alloy plants shifting to trading, the die-casting zinc alloy operating rate is expected to pull back slightly and hover around 50.43%.