Changes in zinc ore supply affect the galvanized steel market

According to data from the General Administration of Customs, zinc concentrate imports reached 491,500 physical tons in May 2025, and 494,700 physical tons in April, which remained high for two consecutive months. The cumulative import volume from January to May was 2.2052 million physical tons, a year-on-year increase of 52.82%. In terms of the average import price, it was US$1,074/dry ton in 2024, and fell in the first five months of 2025, falling to US$1,059.72/dry ton in May. The recovery of import profits has led to an increase in imports. This is mainly due to the accelerated pace of resumption of production at overseas mines. For example, after the Ozernoye zinc mine restarted in September 2024, it will be fully operational in 2025, with an annual output of 600,000 tons of zinc concentrate, accounting for about 4.5% of global production; Ireland's Tara zinc mine will be fully operational in January 2025, bringing about an increase of about 100,000 tons; Peru's Antamina mine adjusted its 2025 production plan to increase the proportion of copper and zinc ore mining, and is expected to add about 170,000 tons of zinc concentrate. ​

In addition to the mines that have resumed production, more projects have plans to increase production. The Kipushi mine in the Democratic Republic of the Congo will be expanded in 2025 and is expected to reach full production in the third quarter, contributing an additional 100,000 to 140,000 tons of zinc concentrate; the Buenavista mine in Mexico is expected to produce more than 154,000 tons of zinc concentrate per year after 2025; the Endeavour mine in Australia is conservatively estimated to have an additional 50,000 tons in 2025; and the second phase of Gamsberg in South Africa is expected to contribute an additional 30,000 tons in 2025. Domestically, a lead-zinc mine in Xinjiang has been put into production, and a lead-zinc mine in Jiangxi is expected to reach a lead-zinc production capacity of 250,000 tons/year after it is fully put into production in 2025. Overall, the global supply of zinc concentrate will continue to grow in 2025. ​

Changes in zinc ore supply are directly related to galvanized steel production. As a key raw material for the galvanizing process, the adequacy of zinc supply affects the cost and output of galvanized steel. When the supply of zinc concentrate increases, the processing fee (TC) is expected to continue to rise, and the smelting profit will be improved, which will alleviate the production pressure caused by the shortage of raw materials to a certain extent. However, if the supply growth rate exceeds the demand growth, it may put pressure on zinc prices, which will then be transmitted to the galvanized steel market and affect the price trend of products. ​

From the demand side, galvanized sheet is the main consumer area of ​​zinc, accounting for more than 50% of global zinc demand. Supported by the infrastructure and automobile industries, demand is growing. It is expected that China's infrastructure investment will remain stable in the second half of the year, and the demand for galvanized steel for new energy vehicles and photovoltaic brackets will continue to grow; the die-cast zinc alloy industry will benefit from the recovery of overseas market demand and the improvement of domestic real estate completion, and consumption is expected to pick up; zinc oxide is mainly used in rubber tire manufacturing. Affected by automobile production, global automobile production and sales are expected to increase slightly in 2025, and zinc oxide demand will remain stable. ​

However, the global macroeconomic growth rate has slowed down, and it is difficult to suppress the explosive growth of zinc consumption. In the short term, the galvanized steel market is affected by the sufficient supply of zinc ore and the high operating rate of smelters. Refined zinc stocks may accumulate, which will put upward pressure on prices; however, the high price of zinc concentrate on the cost side and the expectation of policy stimulus limit the price decline. It is expected that the price of galvanized steel will fluctuate in a certain range in the short term. Market participants need to pay close attention to the supply dynamics of zinc ore, the price trend of raw materials and the changes in downstream demand to cope with market fluctuations.