Terminal Orders Showed Divergence, Zinc Oxide Operating Rates Moved Sideways [SMM Zinc Oxide Weekly Review]

The zinc oxide operating rate came in at 59.07% this week, down 0.35 percentage points WoW. Inventory side, zinc price center pulled back during the week, and increased raw material purchases by zinc oxide enterprises drove a notable rise in raw material inventories this week, while finished product inventories edged lower on price movements. The WoW decline in zinc oxide operating rates was mainly due to some small enterprises currently being in production suspension due to poor orders, dragging down overall operating levels. Currently, although large zinc oxide plants maintained stable orders, industry profits were thin and low-price competition across various products was intense. By segment, tyre factory orders were relatively stable, but feed-grade zinc oxide performed sluggishly, ceramic-grade zinc oxide was constrained by housing market demand with little room for outperformance beyond expectations, and electronic-grade zinc oxide saw improving demand but limited overall consumption. Meanwhile, affected by uncertainties outside China and import/export policy disruptions, some enterprises had certain concerns over end-use product exports. Looking ahead to next week, the zinc oxide operating rate is expected to fluctuate around 59.26%.