Halfway Through Q3 2026: How Are Die-Casting Zinc Alloy and Zinc Oxide Consumption Performing? [SMM Analysis]

SMM August 18 news:

       As Q3 2026 has already passed the halfway mark in the blink of an eye, how has the recent consumption of die-casting zinc alloy and zinc oxide performed? And what are enterprises' expectations for the future?

Die-casting zinc alloy:

       According to SMM data, the operating rate of die-casting zinc alloy in July was 38.18%, down 2.28 percentage points MoM and 5.22 percentage points YoY. Meanwhile, since entering August, the weekly operating rate of die-casting zinc alloy enterprises has been fluctuating around 40-50%. Currently, it is still the traditional consumption off-season, and end-use demand across various sectors has been generally mediocre.

       From the perspective of end-user orders, demand in sectors such as real estate hardware, automotive hardware, luggage zipper hardware, and medal ornaments has been weak. Although a few enterprises reported relatively stable orders, overall market conditions show that end-use consumption remains mediocre and industry demand is still sluggish.

       SMM previously expected the overall operating rate of the die-casting zinc alloy industry to be basically flat compared with July, with the new sample operating rate projected at 38.22%. However, in early August, alloy plants in East China were still affected by extreme weather, leading to production suspensions and shutdowns. Moreover, with high and fluctuating zinc prices providing limited support for downstream consumption, small and medium-sized end-user enterprises remain cautious about future orders, and short-term demand improvement lacks sufficient momentum. Judging from actual market performance and enterprise forecasts, the operating rate of the die-casting zinc alloy industry is expected to continue to be in the doldrums. There is downside risk for the August operating rate, and enterprises also maintain a cautious attitude towards long-term consumption expectations.

Zinc oxide:

       According to SMM data, the operating rate of zinc oxide in July was 44.94%, down 3.78 percentage points MoM and 1.88 percentage points YoY. After entering August, the weekly operating rate of zinc oxide recovered somewhat, driven by production resumptions at some enterprises. SMM expects the operating rate of zinc oxide enterprises in August to edge up to around 45.07%, an increase of 0.13 percentage points MoM, but on a YoY basis it will remain in a weak state.

       August is a period of building momentum ahead of the traditional consumption peak season, but judging from current consumption performance, end-use demand has not shown significant improvement. By sector, according to CPCA data, nationwide retail sales of passenger cars from August 1-9 were 317,000 units, down 22% YoY and 3% MoM, getting off to a weak start; meanwhile, in the first half of August, some tyre factories were still in shutdown, which weighed on consumption of rubber-grade zinc oxide; end-use demand for ceramic-grade zinc oxide was affected by the real estate market, with insufficient terminal support; although feed-grade zinc oxide consumption remains sluggish, with the approach of the Mid-Autumn Festival and National Day holidays, demand is expected to improve somewhat; electronic-grade zinc oxide has performed relatively stably overall, and as the September-October peak season arrives, there will still be some development opportunities, with some market enterprises bullish on demand in this sector.

       Overall, the current high zinc prices continue to suppress end-use consumption of die-casting zinc alloy and zinc oxide, and the market has not yet shown clear signs of consumption recovery in August. As previously halted enterprises resume production and the traditional peak consumption season approaches, the operating rate of zinc oxide is expected to have slight room for rebound in the short term, but will remain in negative growth on a YoY basis; the die-casting zinc alloy sector is greatly disturbed by high zinc prices, and combined with ongoing disruptions from extreme weather in east China, the upside room for its operating rate is expected to be relatively limited.

     (The above information is based on market collection and comprehensive assessment by the SMM research team, and is for reference only. This article does not constitute direct investment, research, or decision-making advice. Clients should make prudent decisions and should not use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.)