Raw material side, the supply of core raw materials such as steel ash and electric furnace ash all declined to varying degrees in May, directly affecting the overall raw material supply level of the industry. Specifically, on the blast furnace front, some blast furnaces entered the maintenance phase in May, with maintenance shutdowns basically concentrated throughout the entire month of May. As a result, the daily average hot metal volume in May was expected to decrease by approximately 10,000 mt compared to April, and as a by-product of blast furnace production, steel ash production edged down in tandem with hot metal volume.
The impact on the electric furnace front was more complex. In May, not only was there a short-term shock from holiday shutdowns that led to a phased decline in electric furnace operating rates, but there was also dual pressure from tight invoice supply from upstream and continuously tightening tax invoice regulatory policies — insufficient invoice supply directly affected raw material purchase processes, while stricter tax invoice regulation further increased compliance costs for upstream enterprises. Under the combined effect of these dual factors, the supply of electric furnace ash in May decreased notably compared to April. Overall, the total supply of core raw materials for Secondary zinc oxide contracted in May compared to April.
Production side, the production performance of Secondary zinc oxide enterprises was relatively stable, with no wild swings. After entering May, most Secondary zinc oxide enterprises gradually adjusted their production schedule plans, and production arrangements became more stable. Capacity previously affected by difficulties in raw material purchases gradually recovered, but the invoice issues that had existed since April were not effectively alleviated and remained the core bottleneck constraining the full release of enterprise capacity. On balance, Secondary zinc oxide production in May was expected to be basically flat compared to April, making it difficult to achieve notable growth.
Price side, the Secondary zinc oxide market edged up in May, with the core drivers being dual support from cost increases and supply-demand imbalance. On one hand, invoice issues further intensified in May, compounded by a slight decline in the supply of core raw materials such as steel ash, which directly pushed up the production costs of Secondary zinc oxide, with the cost side's supportive role continuing to be prominent. On the other hand, although some imported resources supplemented the Chinese market, imports were limited and could not effectively alleviate the undersupply situation in the Chinese Secondary zinc oxide market. The supply-demand imbalance further drove prices higher, and Secondary zinc oxide prices were expected to edge up from mid- to late May. Looking ahead, the core issues currently constraining the market—tight invoicing and raw material shortages—remain difficult to fundamentally resolve in the short term: the tightening trend in tax invoice regulatory policies is unlikely to change easily, and the recovery of raw material supply from blast furnaces and electric furnaces also requires a certain period. Combined with the steady release of downstream demand, the Secondary zinc oxide market is expected to maintain a pattern of "tight supply and stable demand" going forward, with prices most likely continuing their upward trend.
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