On August 1st, entering the traditional Chinese off-season, the zinc downstream enterprises reflect that the overall signs of orders are still weak, and the orders for zinc oxide enterprises are weak. What is the reason for this?
According to the survey, in July, the operating rate of zinc oxide enterprises was 51.37%, a decrease of 3.3 percentage points from the previous month. The average operating rate of zinc oxide enterprises in January-July decreased by 5.85 percentage points compared with the same period of last year. The operating rate of zinc oxide has dropped significantly, who is the chief culprit?
In my opinion: First, the Sino-US trade war has had a certain impact on the export of some zinc-consuming products. And it has a great influence on the tire export with the largest proportion of zinc oxide terminals. Part of the zinc oxide enterprises feedback, tire orders weakened, affecting the demand for zinc oxide orders, resulting in a decline in production.
Second, environmental protection is still one of the important factors affecting the operating rate of zinc oxide enterprises. This year, the environmental protection efforts have become stricter. In the early stage, Jiangsu Yangzhou, Shandong Zhucheng and many other places were affected by environmental inspections. Non-compliant enterprises were shut down or relocated and rectified. There is still no significant recovery. And in July, environmental inspections in Hebei and other places hit again. Not only has an impact on galvanizing enterprises, but also has a large impact on some local zinc oxide enterprises. Among them, Gaochun, Shijiazhuang and other places have different degrees of influence, resulting in limited production in July.
The third, July-August is the traditional off-season of downstream enterprises, and the overall demand for orders in the market is weak. In hot weather, some companies enter the routine maintenance, which also affects the overall order. In August, environmental protection and high-temperature maintenance companies recovered slowly, and terminal demand continued to weaken. According to the company’s order scheduling and arrangement, the operating rate is expected to remain at a low level in August.