September Zinc Slag Coefficient Declined, How Will It Perform in October? [SMM Analysis]

According to SMM, the overall zinc slag coefficient in September declined. What are the reasons? How will it operate in the future? SMM analyzes the main reasons as follows:

Firstly, zinc oxide enterprises had a good operating rate in September. Driven by good performance in orders related to tires and other products throughout the year, although the operating rate was weaker than the same period in 2023, the high operating rate brought certain resilience in demand for zinc slag from zinc oxide enterprises, providing some support for the zinc slag coefficient.

Secondly, the operating rate of galvanising enterprises improved in September, leading to an increase in zinc slag production. Additionally, the price of ferrous metals also rebounded, improving enterprise profits. With better orders in September, galvanising plants were also willing to offer some concessions, resulting in a slight decline in the coefficient.

Thirdly, the trend of zinc prices had a suppressive effect on the zinc slag coefficient. The strong performance of zinc prices in September led to a rise in zinc prices, causing the zinc slag coefficient sold by galvanising enterprises to decline slightly.

Overall, with zinc prices continuing to fluctuate at high levels, the zinc slag coefficient has stabilized under the current circumstances. Given the current operating rate of galvanising enterprises and future expectations, this contradiction is expected to continue, and no short-term turnaround in the coefficient is seen.