Industry News

(I) Zinc Sulphate Monohydrate: Production cuts intensify to "hedge" against the off-season; prices gain a temporary reprieve. Orders & Operations: Order coverage is 25–30 days (flat); operating rate is 58% (up 5%); capacity utilization is 40% (down 4%). Core Logic: While operating rates have rebounded slightly, capacity utilization has declined again, indicating that major manufacturers are intensifying production cuts and market supply is tightening further in real terms. Cost-side support remains strong—sulfuric acid prices are holding steady at high levels, but more crucially, the coefficient for secondary zinc oxide remains persistently high, acting as a key "hard constraint" on current prices. However, amidst the demand off-season, this only suffices to stabilize prices rather than driving an increase. Raw Materials: Sulfuric acid prices remain high and stable (ex-factory quotes: 1,780–1,980 RMB/ton in Guangxi; 1,800–2,000 RMB/ton in North China/Shandong; 1,900–2,100 RMB/ton in Hunan); the secondary zinc oxide coefficient remains high. Zinc Market Prices: Macro-wise, the escalation of US-Iran geopolitical tensions and the delay in expected Federal Reserve rate hikes have boosted market sentiment and benefited metal prices. Fundamentally, smelters are entering a period of concentrated maintenance in the third quarter, creating expectations of tighter supply; however, weak consumption during the off-season and high zinc ingot inventories (260,000 tons) are capping price gains. Outlook: Driven by macro sentiment, zinc prices are projected to hover around 24,590 RMB/ton next week, an increase from this week. Demand: The feed industry maintains off-season purchasing patterns, focusing on "as-needed" procurement; the fertilizer industry sees support primarily from large groups and specialty fertilizer manufacturers; export demand shows clear off-season characteristics. Shipping rates for major export routes to South America continued to fall this week (down 4–9% from last week, though still 120–235% higher than during stable periods), and enthusiasm for shipments remains low amidst the off-season. Operational Advice: Procure based on actual needs and current inventory levels.

 (II) Zinc Sulphate Heptahydrate: Weakening downstream demand leads manufacturers to operate at low loads and "lie low." Orders and operations: 25–30 days (unchanged); operating rate 72% (unchanged); capacity utilization 56% (down 1%). Core logic: ① Upward shift in cost base. Zinc market prices are trending upward amidst boosted macro sentiment; combined with high transaction coefficients for secondary zinc oxide, raw material costs continue to provide solid support for product prices. ② Broad pressure on demand. In the chemical fiber industry, manufacturers continue maintenance during the off-season, keeping demand sluggish. In the mineral processing sector, demand for processing reagents is declining due to lower lead and zinc grades in raw ore. Shipping rates for major export routes to South America have retreated slightly but remain high, offering no boost to export enthusiasm. Operational advice: Purchase based on actual needs while considering inventory levels.

 (III) Active Zinc Oxide: Production cuts exceeding expectations provide a "floor," while manufacturers hold firm on price bottom lines. Orders and operations: 20–25 days (unchanged); operating rate 64% (down 8%); capacity utilization 38% (down 3%). Despite broad demand weakness, prices show no downward trend, supported by high raw material costs and further contraction in manufacturer capacity. Core logic: ① "Rigid" raw material costs. Transaction coefficients for secondary zinc oxide remain high in tandem with zinc market prices; sulfuric acid prices, while varying by region, remain elevated, effectively capping any potential for a sharp drop in active zinc oxide prices. ② Low demand. In the feed industry, while live hog prices have rebounded (up approximately 1 RMB/kg since June), the loss-making situation has not significantly improved. The rubber tire industry—a key consumer—has entered its traditional off-season (industry feedback indicates a 30–50% drop in demand compared to Q1), with customers in both rubber and feed sectors maintaining a "purchase-as-needed" strategy. In the desulfurization sector, end-users show little willingness to replace desulfurization agents, resulting in no demand recovery for the industry.