The operating rate of zinc oxide enterprises was recorded at 54.76% this week, down 0.17 percentage points WoW. On the inventory side, zinc prices continued to rise this week, cooling the raw material purchase willingness of zinc oxide producers, with raw material inventories extending their decline; sluggish end-use orders pushed finished product inventories slightly higher. The slight pullback in operating rates this week was mainly dragged by weak downstream demand, prompting some producers to actively slow their production pace. Currently, overall end-use market trading is sluggish: the automotive sector saw weakening production and sales, tire enterprises faced inventory backlogs, and their raw material procurement enthusiasm declined; ceramic-grade zinc oxide was dragged by the sluggish real estate sector, with demand similarly weak; while electronic-grade zinc oxide demand showed some resilience, its market share remains low, making it difficult to offset the overall demand shortfall. Next week, enterprises that previously implemented production cuts are expected to release capacity gradually; however, end-use demand is unlikely to improve significantly. The zinc oxide industry operating rate is expected to fluctuate narrowly around 54.94%.
