Zinc Oxide: Recent Commodity Market Intelligence Report

I. Price Dynamics
- National Average Price (Mainstream Markets): From May 22 to May 25, 2026, the national average price of zinc oxide (non-ferrous grade) remained stable at RMB 22,000 per metric ton, with no change week-on-week.
- Regional Market Prices:
- Hebei Province: RMB 22,200/ton for 99.7% purity zinc oxide; RMB 19,300/ton for 99% purity zinc oxide.
- Jiangsu Province: RMB 22,200/ton for 99.7% purity zinc oxide.
- Shandong Province: RMB 22,100/ton for 99.7% purity zinc oxide.
- Guangxi Province: GB-standard zinc oxide quoted at RMB 16,500/ton (Pingshan City Lixin Biochemical High-Tech Co., Ltd.).

II. Supply and Demand
- Supply Side:
- Domestic average zinc oxide operating rate in Q1 2026 stood at 38.88%, down by 3.98 percentage points year-on-year, primarily due to geopolitical risks, an extended Spring Festival holiday, and enterprise shutdowns for maintenance.
- Some zinc oxide producers, facing cost pressures and insufficient order volumes, opted for early holidays or extended shutdown periods—further reducing output.
- Demand Side:
- End-user consumption remains lackluster, with demand from galvanizing, die-casting, and general zinc oxide applications below last year’s levels.
- Rubber-grade zinc oxide demand is closely tied to the tire industry; however, tire manufacturers are grappling with high inventory levels, resulting in low and stable procurement volumes.
- Electronic-grade zinc oxide demand remains relatively robust, supported by State Grid infrastructure projects and growth in household appliance production.

III. Cost and Profitability
- Raw Material Costs:
- Zinc ingot prices significantly influence zinc oxide production costs. In May 2026, zinc prices trended upward but spot market transactions remained weak.
- Sulfuric acid prices continued rising, substantially increasing production costs for active zinc oxide manufacturers reliant on sulfuric acid as a co-feedstock.
- Profit Margins:
- Intense industry competition hampers effective downstream price pass-through, squeezing profit margins across the sector.

IV. Export Market
- Export Volume: As a net exporter of zinc oxide, China maintains annual export volumes below 20,000 metric tons.
- Export Risks: With no fundamental easing of Middle Eastern geopolitical tensions, both direct zinc oxide exports and indirect exports via tire shipments face challenges—including logistical disruptions, settlement difficulties, and weakening overseas demand.

V. Industry Policies and Standards
- Environmental Regulations: The EU’s REACH Regulation and the U.S. Toxic Substances Control Act (TSCA) continue tightening chemical management requirements. In China, supportive policies—including the “New Materials Industry Development Guidelines” and the “Catalogue of Priority Applications for First-Batch Key New Materials”—promote the application of high-purity zinc oxide in strategic emerging industries. Simultaneously, stricter enforcement of the “Emission Standards for Inorganic Chemical Industry” drives cleaner production practices.
- Pharmaceutical-Grade Standards: The latest edition of the Chinese Pharmacopoeia has lowered maximum permissible limits for lead, cadmium, and arsenic in pharmaceutical-grade zinc oxide to 0.0002%, 0.0001%, and 0.0002% (w/w), respectively—accelerating industry transformation toward high-purity, stable supply, and low-carbon manufacturing.

Analysis & Assessment

I. Price Trend Outlook
- Short Term: Zinc oxide prices are expected to remain stable, supported by balanced supply-demand dynamics and cost-based floor pricing.
- Medium Term: Should Middle Eastern geopolitical tensions ease, export demand may rebound sharply, triggering short-term price increases. However, elevated inventories and sluggish general consumer demand will cap upside potential.

II. Supply-Demand Outlook
- Supply Side: Operating rates remain low, with overall supply ample yet slightly lower year-on-year. Mounting cost pressures are prompting industry-wide shifts toward integrated operations and circular economy models.
- Demand Side: End-market recovery remains slower than anticipated; however, State Grid investment and national “trade-in” stimulus policies provide modest support. Electronic-grade zinc oxide demand stands out as a bright spot across sub-segments.

III. Cost Pressure Outlook
- Volatility in zinc ingot and sulfuric acid prices significantly impacts production costs. Tightening environmental regulations further elevate compliance expenditures, intensifying profitability pressure across the industry.

Forecast

I. Price Forecast
- For H2 2026, zinc oxide prices are projected to follow a “stable-then-rising” trajectory. Short-term stability will persist amid balanced fundamentals and cost support; medium-term price gains may emerge if export demand rebounds or end-consumer activity improves.

II. Supply-Demand Forecast
- Supply Side: Operating rates are expected to gradually recover, but growth in output will remain constrained by cost burdens and stringent environmental regulation. Industry consolidation is accelerating, with enterprises possessing core technological capabilities and reliable raw material sourcing gaining competitive advantage.
- Demand Side: End-market recovery will proceed slowly, yet electronic-grade zinc oxide demand is set to grow steadily. Export markets remain uncertain—but de-escalation in the Middle East could trigger restocking activity.

III. Industry Trends
- Technological Innovation: High-purity zinc oxide and nano-zinc oxide have emerged as key R&D priorities, addressing precision requirements across advanced downstream applications.
- Green Manufacturing: Stricter environmental policies are driving industry-wide adoption of low-carbon and circular production models. Certification as a “green factory” and carbon footprint accounting are increasingly critical components of corporate competitiveness.
- Advanced Applications: Zinc oxide’s expanding use in new-energy batteries, semiconductor materials, and other frontier fields is opening promising avenues for long-term growth.