How did zinc oxide perform during the September-October peak season? [SMM Analysis]

The traditional consumption peak season of September-October has arrived again. Now that September has passed, the operating rate of zinc oxide in September recorded 49.81%, up 2.24% MoM. How did the September peak season perform? And how will October operate? Let's analyze from multiple perspectives.

Rubber sector. In September, the operating rate of semi-steel tires continued to support orders for rubber tire-grade zinc oxide. However, orders for all-steel tires were poor and showed no improvement, resulting in no significant increase in orders for rubber-grade zinc oxide in September. Entering October, some all-steel tire factories halted production during the National Day holiday, and orders for all-steel tires remained weak. Additionally, the EU's imposition of tariffs on electric vehicles imported from China is in full swing. If implemented, it could significantly impact China's electric vehicle exports, potentially affecting orders for rubber-grade zinc oxide. Attention should be paid to the subsequent dynamics of the automotive market.

Ceramics sector. In September, as the weather gradually cooled, disruptions to outdoor construction projects decreased. However, the performance of real estate construction and completion did not improve, leading to continued weakness in orders for ceramic-grade zinc oxide. With the real estate market remaining sluggish and temperatures cooling in the fourth quarter, market expectations for subsequent orders in the ceramics sector are not high.

Feed sector. In September, pig prices fell again, and the number of pigs in stock remained largely unchanged. Although some large enterprises resumed concentrated procurement of feed or stocked up in advance, the recovery of small and medium-sized enterprises was limited. Additionally, African swine fever has not ended, resulting in only a slight improvement in orders for feed-grade zinc oxide, with related zinc oxide enterprises also seeing a slight increase in operating rates. In the fourth quarter, pork enters its traditional consumption peak season, and feed demand is expected to continue growing, potentially boosting subsequent orders for feed-grade zinc oxide.

Electronics sector. This year, demand for electronic-grade zinc oxide has continued to improve. In September, related enterprises maintained high operating rates. Entering October, zinc prices reached their highest level of the year after the National Day holiday, causing some end-use enterprises to delay purchases. However, rigid demand still exists, and orders for electronic-grade zinc oxide are expected to remain stable.

Overall, the increase in zinc oxide orders in September was limited, and the rise in operating rates was mainly due to the resumption of production after previous maintenance. Market expectations for orders in October are not high, and some enterprises will halt production for maintenance during the National Day holiday. The operating rate in October is expected to decline, and the overall performance of the consumption peak season appears mediocre.