High Prices Hamper Enterprise Production, Zinc Oxide Operating Rates Decline [SMM Zinc Oxide Weekly Review]

       This week, the operating rate for zinc oxide recorded 55.88%, down 1.37 percentage points WoW. Raw material side, zinc prices remained high during the week, and zinc oxide enterprises' purchase willingness was low, with raw material inventory slightly decreased. Finished product inventories side, some enterprises are currently in a production halt phase, so finished product inventories also decreased this week. Terminal orders side, some large factories reported that overall order demand remained relatively normal, however, small and medium-sized enterprises were significantly impacted by high prices, and downstream order demand pulled back. For rubber-grade zinc oxide, some tyre factories gradually entered the pre-holiday winding-down stage, and some zinc oxide enterprises also reported that downstream demand was average; ceramic-grade zinc oxide demand gradually weakened due to seasonal consumption effects; for electronic-grade zinc oxide, varistor demand was relatively average, but valve chip order demand remained relatively stable. This week's decline in zinc oxide operating rate was mainly due to some enterprises still being in a production halt state after the New Year's Day holiday due to high price impacts, coupled with certain production control measures by enterprises, leading to the decline in operating rate this week. Looking ahead to next week, production resumptions are expected to gradually resume, and the zinc oxide operating rate is expected to rise to around 57.18%.