India: Zinc semi-finished imports increase over 20% m-o-m in Aug'24, S. Korea remains top supplier

In August 2024, semi-finished zinc ingot imports to India reached 15,093 tonnes (t), marking a 24% increase compared to 12,188 t in the previous month. However, imports declined by 30% compared to 21,710 t in the same month last year. South Korea remained the leading supplier of zinc semi-finished ingots to India, accounting for approximately 55-60% of India's total imports in this category. In August, South Korea exported 8,427 t to India, a 34% increase m-o-m from 6,290 t in July.

Japan was the second-largest supplier, contributing about 20-25% of India's semi-finished zinc ingot imports. In August, Japan's exports totalled 3,658 t, reflecting a slight 6% decline from 3,877 t in July.

In contrast, Australia saw a notable increase, exporting 669 t, up 35% from 496 t in the previous month. Additionally, other countries collectively shipped 2,339 t, representing a rise of over 50% compared to July.

Is rising semi-finished imports a cause of concern?

The basic Customs duty on primary zinc product imports is currently set at 5%, but domestic semi-finished manufacturers are urging the government to raise it to 7.5%. They argue that the country's zinc consumption is comfortably within its domestic production capacity. India boasts a primary zinc production capability of 880,000 tonnes per annum (tpa), while the total annual zinc demand is 660,000 t. Notably, about 23% of this demand is satisfied through zero-duty imports under free trade agreements with Korea and Japan, which do not emphasise value addition.

Zinc scrap imports

In August, zinc scrap imports have significantly increased by 29% to 7,456 t in comparison with 5,796 t in July this year . Moreover, imports increased by 14% as compared to 6,550 t in August 2023.

Grade-wise imports

The top grade imported was saves, up by 9% in August to 4,762 t in comparison with 4,387 t in July. It was followed by score, up by 97% m-o-m reaching 1,697 t as compared to 861 t in July, followed by scroll at 372 t in August in comparison with 214 t in July.

LME zinc price trends

The average LME zinc price has decreased by 4% in August to settle at $2,794/t in comparison with $2,898/t in July. Meanwhile, metal stocks at LME-registered warehouses showed positive trends, rising by 6% in August to 248,555 t, to remain stable from the previous month.

Aligning with the decline in LME zinc prices, the monthly average prices of BigMint's assessment of zinc diecast (5%) scrap originating from the Middle East region stood at $2,080-2,090/t levels, CFR Mundra. This marks a decline of 2% m-o-m compared against the previous month's $2,130-2,150/t levels.

Country-wise scrap shipments

The top exporter for scrap in August was the US at 915 t, followed by the Netherlands at 856 t, Saudi Arabia at 563 t and others at 5,122 t as per provisional data maintained with BigMint.

Recent updates

Korea Zinc shares have surged amid speculation that private equity firm MBK Partners will raise its tender offer in a bid to gain control of the world's largest zinc refiner. MBK is reportedly increasing its bid to KRW 750,000 ($566)/share, up from KRW 660,000 ($498). The firm aims to acquire up to 14.6% of shares and oust Chairman Choi Yoon-beom, with the tender offer deadline set for 4 October. In response, Korea Zinc has raised concerns that the takeover could disrupt local zinc and lead supplies, potentially forcing domestic auto, steel, and semiconductor companies to rely on imports, thereby increasing their costs.

Market outlook

Imports of zinc semi-finished ingots and scrap are expected to remain steady. Looking ahead, zinc demand is projected to grow by 43% in solar and wind energy applications by 2030, driven by the global transition to renewable energy. India's rapid economic expansion and infrastructure development present significant opportunities for greater zinc utilisation, particularly in mitigating corrosion-related expenses, which currently account for nearly 5% of the country's GDP. Additionally, the automotive sector is poised for higher demand for galvanized steel by 2030, aligning with global trends. This surge in consumption could prompt buyers to explore cost-effective sourcing alternatives, likely supporting increased imports of zinc.