Secondary Zinc Oxide Production Fell in February, While Secondary Zinc Oxide Payables Remained Relatively Firm. What Trend Will Secondary Zinc Oxide Show in March?

SMM, February 5: Approaching the 2026 Chinese New Year break, SMM conducted a series of surveys on the pre-holiday shutdowns among domestic zinc oxide enterprises, covering 20 companies with a combined annual capacity of 479,600 mt. The holiday period is expected to impact zinc consumption by approximately 4,968 mt. Results indicate an average holiday duration of 21.35 days for the industry, an increase of 1.25 days compared to the same period last year. From the perspective of enterprise holiday arrangements, the industry shows significant divergence: major leading factories largely maintained holiday plans consistent with the previous year, while some enterprises continued normal production during the Chinese New Year period due to favorable order demand and the continuous process requirements of zinc oxide production. Meanwhile, some companies adjusted from non-stop production during last year’s holiday to extended shutdowns this year due to technological transformation and equipment maintenance plans, becoming a key factor driving up the industry's average holiday duration. Order demand also displayed structural differences, with varying market conditions across different grades of zinc oxide: chemical-grade zinc oxide orders recently showed improvement, and demand from large tyre factories remained stable. However, after entering February, the peak season for feed-grade zinc oxide has passed, and demand gradually pulled back, while ceramic-grade zinc oxide faced weak market demand due to production cuts and shutdowns among end-user ceramic plants. Additionally, overall profitability in the zinc oxide industry remains low, and under cost pressure, some small enterprises opted for early holidays, while others slowed down their production pace before the holiday. SMM will continue to track and report on the operational dynamics of the zinc oxide industry around the Chinese New Year period.

According to SMM, the environmental protection costs in Europe are excessively high, resulting in a relatively low overall volume of rotary kilns. In contrast, Southeast Asia offers lower environmental protection costs and reduced steel ash expenses, leading to an increasing number of enterprises choosing to go global for the production of low-grade zinc oxide.

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