Galvanizing Demand Holds Steady as Auto Sector Supports Zinc

The galvanizing sector — the single largest end-use for zinc, consuming roughly 50% of global supply — is showing consistent demand growth of 1.5% year-on-year as of mid-2026. US galvanized steel production edged up 0.8% in May, according to the American Iron and Steel Institute, with construction and infrastructure galvanizing orders steady.

European galvanizers operated at 78% capacity in Q2 2026, up from 76% in Q1. The improvement reflects modest construction recovery in Germany and France, where building permit issuance rose 2.1% and 1.8% respectively. Italian galvanizing demand is supported by bridge and highway infrastructure projects funded by the EU Recovery and Resilience Facility.

Chinese galvanized sheet output rose 4.1% in May year-on-year, driven by infrastructure galvanizing demand from the 14th Five-Year Plan highway program. Galvanized pipe and tube output grew 3.2%, supported by water infrastructure projects. China accounts for roughly 45% of global galvanizing demand.

The automotive sector — responsible for 25% of galvanizing demand — grew 3.2% in zinc consumption globally in Q2 2026. The increase is driven by NEV production, which uses approximately 15% more zinc per vehicle than internal combustion engine equivalents, due to additional galvanized body panels and chassis components to offset battery weight. Global NEV production in Q2 2026 hit 4.8 million units, up 18% year-on-year.

Bearish risk: construction-sector zinc demand in China is showing early signs of softening as property development loan growth slows. Chinese real estate investment fell 2.8% in May, the third consecutive monthly decline. If property construction weakens further, Chinese galvanizing demand could contract in H2 2026, removing 100,000-150,000t of annual zinc demand.