Galvanized Steel Demand Holds Steady, Anchoring Zinc Consumption at 60% of Market

Galvanized steel production — the single largest end-use for zinc — has held roughly steady through the first five months of 2026 despite a mixed global economic backdrop. The stability of galvanizing demand is a critical support for zinc prices at a time when other industrial metals are seeing demand erosion. Galvanizing consumes approximately 8.2 million tonnes of zinc annually, or 60% of global refined zinc consumption.

The composition of demand is shifting geographically. Indian infrastructure spending, up an estimated 15% year-over-year, is driving galvanized steel consumption for bridges, transmission towers, and rural electrification. US highway and bridge spending, supported by infrastructure legislation, was up roughly 8% through May. These gains are offsetting a slowdown in Chinese commercial construction, where galvanized steel use for roofing and structural elements has declined in line with the property sector.

Automotive galvanizing — which accounts for approximately 15% of zinc demand — is flat. Global light vehicle production was up roughly 1% year-over-year through May. The shift toward electric vehicles has a mixed impact on zinc: EVs use more galvanized steel for battery enclosures and structural components, but fewer vehicles overall are being produced at the margin. The net effect on zinc demand has been roughly neutral in 2026.

The outlook for H2 2026 depends on whether infrastructure spending continues to compensate for construction weakness. India’s infrastructure budget for the fiscal year ending March 2027 represents a 20% increase, suggesting strong galvanizing demand through at least Q4 2026. In the US, the pipeline of funded highway projects extends through 2027. The risk is a broader global economic slowdown that hits infrastructure budgets.