Zinc oxide market stable

Although spot zinc ingot price decreases continuously and reached to the low level of RMB25,400-25,500/t (USD3,382-3,395/t) this Tuesday, zinc oxide market keeps relatively stable.

A source from a Jiangsu-based producer with a monthly output of 100tpm offered its zinc oxide 99.7%min at around RMB25,000 (RMB3,329/t) ex works. "Spot zinc ingot price has slid by about RMB1,000/t (USD133/t) in recent two weeks, but zinc oxide price remains at the level of around RMB25,000/t (RMB3,329/t) ex works, the same level as that the previous two weeks," said the source.

"As our plant is carrying out long-term contracts, we could not adjust zinc oxide price in such a short time. In addition, the direction of zinc ingot market is still unclear, so we prefer to keep watching the market," said the source.

The source believes that spot zinc ingot price would drop further, pressed down by the downward movement of 3-month zinc on LME. Zinc oxide price may follow suit in the coming days.

The source said that the plant purchased some stocks of zinc ingot at around RMB26,000/t (USD3,462/t) delivered to its warehouse, when the mainstream price was at around RMB25,900/t (RMB3,449/t).

Another producer in Tianjin offered zinc oxide 99.7%min at around RMB24,800/t (USD3,302/t) processed from zinc scraps, almost unchanged with that half a month ago.

The source revealed that most producers mainly sell zinc oxide to regular customers and received few inquiries from new buyers. "As zinc consumption would not change greatly in the near future, zinc oxide market would keep stable in the following weeks," said the source. The plant is running with an output of 350tpm.