Zinc is a moderately reactive bluish white metal that tarnishes in moist air, producing layer of carbonate. It is the fourth common metal in worldwide annual production trailing only iron, aluminium and copper. It is mainly used for galvanizing, which involves coating steel with zinc in order to guard it against corrosion. Galvanizing includes sheets, tubes and wires.
Industry structure: The zinc industry is broadly divided into three types of producers:
- Miners who mine the lead zinc ore and produce zinc concentrate.
- Custom smelters who refine the zinc concentrate and produce the refined metal.
- Integrated players who mine the lead zinc ore from their captive mines and produce the metal through smelting and refining.
Zinc mining is carried out in nearly 50 countries. China, Australia and Peru are among the largest zinc mining countries in the world. While, the major custom smelting locations include Western Europe, South Korea, Japan, and China
Pricing structure: Prices of zinc are determined at the London Metal Exchange (LME). However, producers normally charge a regional premium, which is market driven. Custom smelters profitability is determined by the treatment charges (TC) rates, as the prices of zinc concentrate are equal to LME prices net of TC. Prices of finished zinc products are equal to LME plus premium. The TC rates are influenced by the demand and supply of zinc concentrate in the market, current and forecasted LME prices, mining rates and freight costs.
User industries: Zinc is fourth widely used metal in the world. It is used in various applications.
Galvanizing: Zinc is one of the best anti corrosion metals and thus is extensively used in construction, automobile, household appliances, steel furniture etc.
Zinc oxide: It is the most commonly used zinc compound and founds uses in vulcanization of rubber, ceramics, paints, animal feed, pharmaceuticals and photocopiers.
Die-castings: It is best material for die-casting and is used extensively in hardware, electrical equipment, and automotive and electronic components.
Rolled zinc: Zinc sheets are used in the construction industries for roofing, flashing, weathering applications. It is also used in graphic art to make plates and blocks as well as battery callouts and coinage.
Alloys: It is used in making alloys. Brass is an alloy of copper and zinc.
In the next article, we would discuss about the development of zinc industry in India and its current scenario.