End-Use Demand Slows Down, Zinc Oxide Operating Rates Decline [SMM Zinc Oxide Weekly Review]

SMM December 5:

      This week, the operating rate for zinc oxide recorded 56.45%, down 0.92 percentage points WoW. Raw material side, zinc prices rose to a six-month high, while end-use demand for zinc oxide slowed recently, leading to a slight decrease in purchasing enthusiasm among zinc oxide enterprises and a pull back in raw material inventory. Finished product inventories side, influenced by rising zinc prices, some zinc oxide plants adjusted prices accordingly, resulting in stronger wait-and-see sentiment among end-users and an increase in finished product inventories. The decline in the zinc oxide operating rate this week was mainly due to weakening demand, with some enterprises slightly reducing their operating rates. Terminal orders side, inventory pressure at all-steel tire plants increased recently, and demand slowed down. For ceramic-grade zinc oxide, some ceramic plants gradually entered production reduction or shutdown, and demand for ceramic-grade zinc oxide remained relatively average. Feed-grade zinc oxide performed relatively stable overall. In the electronic-grade zinc oxide sector, orders for lightning arresters remained relatively strong. Looking ahead to next week, as end-use demand weakened recently, the zinc oxide operating rate is expected to hover around 56.29%.