China zirconium sponge prices set to ease as costs fall and demand slows

Zirconium Sponge

China zirconium sponge prices are likely to fall through the third quarter. Producers see weaker spot buying from acetic acid users. Therefore, China zirconium sponge prices face pressure despite steady contract deliveries.

Producers adjust output and pricing

Liaoning Huagao maintains normal runs to serve long-standing Q3 contracts. The firm expects softer spot values ahead. Meanwhile, Citic Jinzhou sells inventory and keeps output curtailed. Chaoyang Orient lowers run rates and moved small lots at Yn150/kg. It focuses on 2024 nuclear-grade sponge contracts with overseas customers. BaoTi Huashen accepted lower bids recently and sold Q3 tons at Yn155/kg. As a result, China zirconium sponge prices reflect defensive producer strategies.

Downstream softness tightens the market balance

Demand from zirconium mill products remains tepid this year. At the same time, acetic acid sector buying has slowed noticeably. About 65-70pc of zirconium goes to mill products, with 30-35pc to acetic acid. The mix amplifies price sensitivity when either segment weakens. Only a limited group produces sponge in China, concentrating supply dynamics. Operators include Chaoyang Orient, BaoTi Huashen, Citic Jinzhou, and Liaoning Huagao. Therefore, any run-rate changes can move sentiment quickly. China zirconium sponge prices could soften further if Q3 inquiries lag.

The Metalnomist Commentary

The near-term tone stays bearish until acetic acid orders stabilize. Watch producer run-rate guidance and tender frequency for a floor. Contracted nuclear-grade volumes may cushion declines but won’t lift spot alone.