Zinc demand proved resilient in Q2 2026, with global galvanized steel consumption rising 3.8% year-on-year. The construction sector, which accounts for 55% of global zinc consumption, has been the primary driver, particularly in emerging markets where urbanization and infrastructure programs remain on track despite higher interest rates.
India stands out as the fastest-growing major market, with zinc demand rising 8.2% year-on-year in Q2. The country's National Infrastructure Pipeline and rapid railway electrification are consuming large volumes of galvanized steel. Chinese demand grew a more modest 2.1%, with property sector weakness offset by strong grid and infrastructure investment. US demand increased 3.5%, supported by the infrastructure bill and reshoring of manufacturing.
The auto sector, accounting for 20% of zinc use, is a mixed picture. Global auto production rose 1.8% year-on-year but the shift toward electric vehicles presents a structural headwind, as EVs use less galvanized steel than ICE vehicles. However, the transition is gradual — EVs accounted for 22% of global auto production in Q2 2026.
The ILZSG forecasts global refined zinc demand at 13.98 million tonnes in 2026, growth of 2.2%. With supply constrained by mine grade depletion and concentrate shortages, the market is expected to be in a modest deficit. Demand growth in H2 2026 should accelerate as Chinese infrastructure stimulus flows through to steel and galvanizing demand.
Zinc's construction demand base provides a floor under prices. Buyers should not expect a significant price correction. The infrastructure-driven demand growth in India and the US is structural, not cyclical. Consider securing 6-9 month supply agreements at fixed premiums. Spot purchases may carry increasing backwardation as the year progresses.