Beijing, Tianjin, Hebei, Shandong, Shanxi, Henan and Inner Mongolia will execute restrictions on production to secure air quality for the big parade due to the 70th anniversary of the victory of the War against Japanese Aggression, SMM learned.
The production restrictions across the tire sector in Shandong will take a toll on zinc oxide demand. Most of tire producers in Shandong’s Dongying will be forced to cut output. Shandong has over 300 tire producers which produce 60% of the total tire output in China. Over 170 low-end tire producers are located in Dongying.
Most galvanized plate producers in Hebei’s Bazhou will also be forced to cut output, including large galvanized tube producer Hengshui Jinghua and Handan Youfa. Hebei and Tianjin have an agglomeration of galvanizers, which consume nearly 30% of China’s zinc output.
Operating rates at galvanizers and zinc oxide producers will thus slide further in August, SMM foresees, dampening zinc consumption.
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