Zinc demand from the galvanized steel sector — the largest end-use market for zinc — has shown remarkable resilience despite elevated LME prices. The stability is underpinned by China's CNY 3.8 trillion infrastructure stimulus package for 2026, which has accelerated bridge, highway, and utility pole projects across 28 provinces. Galvanized steel consumption in China rose 2.8% year-on-year in May, with transmission tower orders up 12%.
In the United States, non-residential construction spending increased 4.2% year-on-year in May, driven by manufacturing facility construction (semiconductor fabs and EV battery plants) and highway infrastructure under the Infrastructure Investment and Jobs Act. Galvanized structural steel orders in the US reached 1.05 million tonnes in May, in line with the 2026 monthly average.
The European market remains the weak spot. Construction PMI in Germany — Europe's largest galvanized steel consumer — improved marginally to 44.8 in May from 43.2 in April, but remains well below the 50 expansion threshold. French and Italian construction activity is similarly subdued. European galvanized output contracted 1.8% year-on-year in May, though the decline rate is moderating.
An emerging demand driver is the solar mounting structure market. Galvanized steel is the dominant material for solar PV mounting frames and ground-mount racking systems. Global solar additions are projected to reach 700 GW in 2026, up from 580 GW in 2025, requiring approximately 420,000 tonnes of zinc for galvanized solar infrastructure — a 21% year-on-year increase.
Infrastructure-driven zinc demand provides a stable consumption floor that will prevent any sharp price collapse even as the market transitions toward surplus. Use any weakness below $3,300/mt as buying opportunities for H1 2027 requirements. The solar demand angle adds a structural growth component that was not present in previous cycles.