What is zinc?
Zinc is one of the most widely consumed metals. It’s used in galvanizing steel because of its strength and resistance to oxidization when exposed to water and air. Depending on environmental conditions zinc can erode up to 100 times slower than other metals. Even if steel is cut or the surface is scratched the zinc nearest to the exposure will corrode before the steel does.
How it affects the market?
The top three zinc producing countries are China, Peru, and Australia – with China producing about 34% of the world’s zinc. Nearly half of all zinc produced is used in the galvanizing process. Like many of the raw materials that go into steel production, mining closures or production decreases can impact the available inventory of steel. Zinc can affect pricing from the mills due to the impact on total cost of coating finished steel.
What should you do?
Since China produces the largest portion of the world’s zinc, their production outputs and mine closures can heavily impact global supply. Watching both can help predict where Zinc is headed. Being aware of events like the Chinese New Year that potentially slow manufacturing can also help you plan ahead. Majestic’s CORE Report follows zinc production and the mines that produce it; along with other indicators every week to see where the market stands.