Chinese zinc oxide prices followed a decreasing path during April 2025, under pressure from high inventory and lukewarm downstream consumption. Despite stable production dynamics, the market remained oversupplied due to improved feedstock availability and muted procurement behaviour. Softness in end-use industry, particularly the tire and rubber sector, also contributed to the weakness in price sentiment, while general economic pressure coming from overseas trade tensions further accompanied the market's cautionary stance.

On the supply side, zinc oxide stocks remained elevated for the month as availability of zinc feedstock improved. Domestic zinc mine production, which had declined in the first quarter due to seasonal weather effects, began to improve in April as temperatures warmed up, particularly in northern China.  The seasonal recovery, combined with increasing import tonnages, resulted in an increase in overall zinc ore supply.

With sufficient raw materials available now and most producers using previously stored inventories, zinc oxide production remained stable contributing to a supply excess in the market despite weak downstream demand.

Zinc oxide demand, however, remained sluggish, with majority of players taking recourse to just-in-time procurement practices.  Rubber-grade zinc oxide demand weakened significantly as tire plants struggled with orders shortages and increasing finished goods inventories. The ceramics sector helped to provide some stability with regular offtake, but this was not enough to offset the wider slowdown.

Export markets were of little help, with little rush to export activity and delayed payment by overseas buyers adding to the caution among producers. The May Day holidays also depressed procurement activity, as several downstream industries scheduled temporary shutdowns, indicating a possible further cut in zinc oxide procurement rates for May.

Macro-economically, Chinese manufacturing activity flagged in April with contraction deeper than anticipated. Most of the downtrend was related to rising trade tensions with America, which hit bilateral trade streams and dented overall business sentiments. For the producers of zinc oxide, such a broader slowing further supported already subdued demand levels, particularly from exporters facing risk of tariffs. Amid these uncertainties, downstream buyers—especially from the rubber and tyre sectors curtailed zinc oxide procurement, leading to sluggish replenishment activity across the value chain.

Looking ahead, the outlook for May points to a continuation of the current downtrend. Certain zinc oxide producers are likely to cut operating rates or close temporarily for the early-May holiday season, providing only modest relief to the oversupplied market. Lacking a compelling demand-side trigger or change in trade conditions, Zinc oxide prices will most likely remain under pressure.