SMM learns that zinc slag payables remain relatively stable at high levels in recent years. What are the reasons? How will they perform in the future?
SMM analyzes the main reasons as follows: End-use consumption weakened, and the operating rates of galvanising enterprises continued to weaken in June. Under the condition of weakened demand, the operating rates of both large and small factories declined significantly, and overall zinc slag production was not high. Moreover, due to fewer orders, it was difficult for processing fees to rise, leaving galvanising plants with little room to offer discounts, and the payables remained relatively firm.
Zinc price movements exerted certain pressure on zinc slag payables: In June, zinc prices continued to consolidate at highs, the willingness to sell of galvanising plants increased, some galvanising enterprises still had a psychology of holding prices firm when selling, but the overall operating rates of zinc oxide enterprises slightly weakened in June, and zinc oxide enterprises used crude zinc to replace zinc slag, with crude zinc payables remaining relatively firm and zinc slag prices also relatively firm, keeping overall prices stable.
Looking ahead to the future, under the influence of invoices and the decline in operating rates of galvanising plants, zinc slag supply remains tight. Under the condition of weak supply and demand, based on the current operating rates of galvanising enterprises and future expectations, there is little opportunity for the payables to decline. Furthermore, crude zinc payables have remained stable, so zinc slag payables are expected to remain relatively firm.
![Galvanizing operating rate weakens YoY in Q2, recovery expected in September peak season in Q3 [SMM analysis]](https://imgqn.smm.cn/usercenter/ipTIN20251217171755.jpg)
![Rate Hike Expectations Disrupt, SHFE/LME Zinc Price Ratio Rebounds to Around 7.0 and Fluctuates [SMM Zinc SHFE/LME Price Ratio Weekly Review]](https://imgqn.smm.cn/usercenter/Txorc20251217171755.jpg)
