The global zinc production is expected to hike by 2.4 percent to 13.5 million metric tonnes in 2020. As one of the largest players in the industry, India will be among those spearheading this significant growth.
In fact, in 2017, India produced 1.3 MMT of zinc, which is nearly double the amount of the previous year. Although the per capita consumption of the metal in the country is at 0.6 kg, which is behind the world’s average 2 kg, many market pundits believe that this is going to change very soon. The demand for zinc in India is predicted to rise by 7-8 percent annually in the coming years.
Of course, the zinc industry isn’t insular. Owing to the collective decline of the Indian economy – which continues to stumble – it has taken a significant brunt over the past year. The economy capped a meager growth of 4.5 percent in the September quarter. What’s worse is most economists expect the growth to remain flat even in Q3 of 2020.
Unless, of course, the at-large economy picks, expecting any zinc manufacturer in India – at least the ones without a dominant market position – to have a good time is uncalled for.
The good news, however, is while ‘how the budget 2020 was’ is subjective, the government has indeed taken several of steps towards infrastructural investments. Ensuring more capital flow in different segments can put the Indian economy on the path to recovery. This would then take zinc suppliers India based with it to a few highs before stabilizing on the desired margin.
On a more direct term, the zinc industry does have a few bright spots that make the scene less oblique. For instance, the automobile sector currently uses only 20 percent of galvanized steel in the production of cars. That is expected to grow to 70 percent, as committed by the automobile manufacturers.
Similarly, the developments in the railways ought to bring better days for the zinc oxide and zinc sulphate manufacturers. The railways is focusing more on infrastructure that lasts longer even amid climate fluctuations, pollution, sun exposure, and other severe conditions. So, it is now demanding more of galvanized steel in future projects. In fact, while, at present, it manually galvanizes steel tracks, it is widely looking for galvanized steel from the zinc suppliers in India.
So, not everything is bad in the industry. Not at least when compared to other industries who are struggling in this economic slowdown. The analysts and market players are hopeful of the better days with higher demand and more production.
But that said, the Indian zinc industry has a long way to go when looked at zinc per capita consumption in the country of 0.5 kg in comparison with that of China that stands at 5.0 kg. A lot needs to be done both in the policy and infrastructural ends.