SMM Aug 1:
The operating rate of zinc oxide producers recorded 56.13% this week, up 0.15% WoW. Raw material side, though zinc prices pulled back this week, end-use demand remained tepid and some raw material procurement stayed relatively difficult, keeping producers' inventories basically flat WoW. Finished product inventories side, despite lower zinc prices, some producers completed maintenance while downstream players adopted a wait-and-see stance amid sluggish demand, leaving inventories largely unchanged. Terminal orders side, the automotive production off-season kept rubber-grade zinc oxide demand subdued. Feed-grade and ceramic-grade zinc oxide demand also remained in the doldrums due to seasonal factors. In the electronic-grade segment, orders for household varistors weakened while power grid demand performed well, such as for lightning arresters. Additionally, desulfurization demand pulled back amid recent high temperatures. As August begins, feed-grade zinc oxide orders are expected to gradually recover. However, given current conditions, producers maintain cautious outlooks on future demand, forecasting next week's operating rate at 56.02%.
