Die Casting Zinc Alloy Operating Rate Extended YoY & MoM Declines in August; Limited Upside for September Recovery

SMM News, September 8:

According to SMM data, the operating rate of new‑sample die‑casting zinc alloy stood at 37.61% in August, down 0.58 percentage points month‑on‑month and 5.45 percentage points year‑on‑year. Why did the month‑on‑month and year‑on‑year operating rates of die‑casting zinc alloy keep falling in August? What are the market expectations for September?

In terms of August performance, the lower operating rate stemmed mainly from two factors. First, high zinc prices curbed market procurement and shipments. Zinc prices moved markedly higher across August, dampening downstream purchasing sentiment and weighing on order intake and shipments of alloy producers. During the periodic pull‑back of zinc prices within the month, end‑users showed improved willingness for spot price‑linked procurement and market trading picked up, yet the improvement was not sustained. Second, heavy rainfall along East China’s coastal regions disrupted production at alloy plants.

From the perspective of end‑user orders, August fell within the seasonal consumption off‑season. Orders across real‑estate hardware, auto‑parts hardware, hardware for suitcases, zippers, decorative fittings, medals and ornaments remained generally tepid. The market was dominated by rigid‑demand orders with limited incremental volume. Die‑casting zinc alloy producers widely reported that zinc price volatility exerted substantial impact on downstream purchasing rhythms: market participants adopted a wait‑and‑see stance when zinc prices rose, while spot price‑linked purchasing was unleashed on price dips, driving volatile trading activity.

From the perspective of end‑user orders, August fell within the seasonal consumption off‑season. Orders across real‑estate hardware, auto‑parts hardware, hardware for suitcases, zippers, decorative fittings, medals and ornaments remained generally tepid. The market was dominated by rigid‑demand orders with limited incremental volume. Die‑casting zinc alloy producers widely reported that zinc price volatility exerted substantial impact on downstream purchasing rhythms: market participants adopted a wait‑and‑see stance when zinc prices rose, while spot price‑linked purchasing was unleashed on price dips, driving volatile trading activity.