Rising Zinc Prices Push Up Raw Material Costs for Zinc Oxide Producers, Triggering Price Hikes

【SMM Flash】Zinc prices trended higher during the week, weighing on downstream order performance. End‑users are wary of high prices and mostly purchase only for rigid needs, putting sales pressure on die‑cast zinc alloy producers. Against the backdrop of elevated raw‑material costs, the market is concerned about the actual delivery strength of the traditional “Golden September” peak‑season consumption.

【SMM Flash 】Affected by the typhoon disturbance, Ningbo and Wenzhou in Zhejiang upgraded their typhoon‑prevention emergency response to Level‑Ⅰ on the evening of the 27th. Some local die‑cast zinc alloy enterprises suspended production as a precaution. Dragged by this factor, the operating rate of die‑cast zinc alloy is expected to decline and fluctuate around 44.5% next week.

On August 28, 2026, LME zinc inventories increased by 75 tonnes to 97,950 tonnes, up 0.08%. Meanwhile, cancelled warrants rose sharply by 19,125 tonnes to 22,350 tonnes, lifting the cancelled-warrant ratio to 22.82%, compared with 3.6% on the previous day. The increase in cancelled warrants was mainly driven by warehouses in Singapore. At the same time, the LME zinc cash-to-three-month structure continued to widen, reaching a backwardation of $231/tonne, highlighting the need to remain alert to potential structural risks in the market.