India: Imports of zinc semi finish decline by 18% y-o-y in H1CY'24, scrap imports witness marginal rise
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Semi-finished zinc imports
In the first year of calendar year 2024 (H1CY'24), semi-finished zinc imports decreased by 18% to 96,720 tonnes (t) compared to 118,400 t in H1CY'23. Imports in June 2024 stood at 11,210 t.
It was observed that imports of zinc saw a sudden decrease in May and June due to a rise in freight rates from Southeast Asian and Far Eastern countries. This increase in shipping costs led to a reduction in zinc imports from these foreign countries.
The major drop is because of decrease in imports of zinc from world's biggest zinc mine which is situated in South Korea. Its production has dropped due to falling prices (down 20% over the past year), which have squeezed profit margins. Rising electricity costs are adding financial strain, prompting cutbacks, financial struggles at companies like Young Poong. In addition, weak global demand from a slowdown in construction and industry has also contributed to reduced production and mine suspensions.
India's zinc production - semi-finished
Additionally, India's domestic zinc production has seen a slight increase of 2%, rising from 4,24,000 t in H1CY'23 to 4,31,000 t in H1CY'24, according to BigMint data.
India is the world's fourth largest zinc producer in 2023, with a 0.51% increase in output from 2022. Over the past five years, production grew at a 4% compound annual growth rate (CAGR) and is expected to rise by 2% CAGR from 2023 to 2027.
India, contributing 7% of global zinc production, saw a 0.99% increase in exports in 2023, with the highest share going to South Korea. Zinc exports are projected to grow at a 38% CAGR between 2023 and 2027. Vedanta Resources, a major producer, increased its output by 10% in 2021, according to GlobalData.
The demand for zinc in India is expected to double in the next 5-10 years due to major investments in the infrastructure sector, particularly steel. Zinc is crucial for galvanising steel to prevent corrosion.
India's zinc exports - semi-finished
India's zinc export has seen a decrease of 33%, dropping to 1,21,850 t in H1CY'24 from 1,81,450 t in H1CY'23, according to BigMint data.
India's largest zinc export in H1CY'24 goes to Singapore, with 29,980 t in H1CY'24, followed by Taiwan with 14,650 t, the UAE with 11,550 t, Thailand with 10,640 t, and other destinations with 52,610 t.
India's zinc consumption - semi-finished
The total consumption of zinc semi-finished in India is around 3,60,950 t in H1CY'23 which increased by 12% y-o-y in H1CY'24 at 4,15,860 t.
Current demand is 800-1,000 t per year of galvanized zinc, with per capita consumption in India significantly lower than the global average. Additionally, the shift towards green energy, including solar and wind power, is expected to further boost zinc demand, according to Economic Times.
Country wise shipments to India - semi-finished
In H1CY'24, South Korea emerged as the top exporter at 59,500 t, a significant decrease of 31% from 86,491 t in H1CY'23, followed by Japan (30,000 t), marking a 35% increase from 22,260 t in H1CY'23. Australia exported 1,510 t, a significant decrease of 41% from 2,570 t in H1CY'23, while other countries collectively shipped 5,710 t also fell by 20% in comparison with H1CY'23.
Zinc scrap
In H1CY'24, zinc scrap imports have marginally increased by 3% to 34,110 t in comparison with 33,020 t in H1CY'23. Zinc scrap imports in June stood at 6,470 t, as per provisional data maintained with BigMint.
The average LME zinc price has decreased by 4% in H1 to settle at $2,670/t in comparison with $2,790/t in H1CY'23.
India's increased zinc scrap imports are driven by slight increase in domestic demand for zinc, driven by expanded industrial activities and infrastructure projects. With the increase in construction and manufacturing, the need for zinc scrap to meet production requirements has grown, leading to higher import volumes.
Grade-wise imports
The top grade imported was saves, which increased by 5% in H1 to 24,280 t in comparison with 23,060 t in H1 of last year, followed by score at 6,600 t, an increase of 160% y-o-y compared to 2,530 t in H1CY'23, followed by screen at 940 t in H1CY'24 in comparison with 760 t in H1CY'23.
Country-wise shipments
The top exporter for scrap in H1 was the US (3,780 t) followed by the Netherlands (2,950 t), Saudi Arabia (2,870 t), the UAE (2,780 t) and others at 19,300 t.
India imports zinc scrap from the US for its high quality and purity, which supports efficient manufacturing. Favourable pricing and exchange rates make it cost-effective, and the established trade relationship ensures smooth logistics. The scrap also meets international standards and benefits from advanced recycling practices, aiding India's industrial and construction sectors.
