Weak Order Demand in Some Sectors, Zinc Oxide Production Starts Decline [SMM Zinc Oxide Weekly Review]

This week, the operating rate of zinc oxide enterprises was recorded at 58.21%, down 1.76 percentage points WoW. Inventory side, zinc prices fluctuated lower this week, and zinc oxide enterprises restocked raw materials on dips, with raw material inventory increasing. However, some enterprises, affected by end-use demand, faced greater shipment resistance, with finished product warehouse withdrawals remaining sluggish and inventory climbing in tandem. This week, industry operating rates pulled back WoW, dragged down by weak end-use demand, as some enterprises slowed down their production pace and capacity release contracted. Overall market consumption performed weakly, with orders for some product categories showing no improvement. Rubber raw material costs climbed, and downstream factories cut production to hedge risks, with related demand continuing to weaken; feed-grade zinc oxide remained sluggish due to the live hog market; coupled with the real estate stabilization policy, ceramic-grade zinc oxide demand also lacked upward momentum. Overall, demand across all sub-segments appeared mediocre. Looking ahead to next week, the weak end-user landscape is unlikely to change, and the industry operating rate is expected to further decline to fluctuate around 57.98%.