Material Insights · Understanding the Material World

Steel and Zinc

Galvanising, coating steel with zinc so the zinc corrodes first, takes about 60% of the world's zinc, so zinc demand follows output of steel that must resist corrosion, while zinc is a large share of a galvaniser's cost.

Steel (commodity) and Zinc (commodity): 4 relationships.

How they are linked

1. Galvanising: zinc protects steel

Physical flow · Strong · Zinc → galvanised steel

A zinc coating shields steel as a barrier and, where scratched, corrodes in place of the steel, so galvanised steel lasts far longer outdoors.

  • about 60% galvanising share of global zinc first uses
  • 45 to 85 µm typical hot-dip galvanised coating thickness
  • 610 g/m² zinc in an 85 µm coating

Coating life is directly proportional to thickness in a given environment, so heavier coatings mean more zinc per tonne of steel. Galvanised steel is also the leading use of refined zinc in the United States.

Sources: USGS; Hindustan Zinc; Wedge Group Galvanizing

2. Price link: main use

Cost and price · Weak · Both ways

Galvanising links zinc demand to steel output, mainly in China, but the site's US steel price responds to tariffs and local supply rather than to world zinc.

  • 0.00 monthly change correlation
  • 0.28 12-month change correlation
  • 0.47 fitted elasticity

Month to month the two prices are unrelated, and yearly changes share only a weak common cycle, with zinc leading by about two months. The physical tie is strong but runs through volumes, not prices.

Sources: Material Insights (World Bank, FRED, IMF data)

3. Zinc is the galvaniser's biggest cost

Cost and price · Medium · Zinc price → galvanising cost

A hot-dip galvaniser's main purchase is zinc, so zinc price moves pass quickly into galvanising charges and coated steel premiums.

  • 35 to 50% zinc share of a hot-dip galvaniser's operating cost

Because zinc dominates cost, galvanisers control coating thickness closely: each extra 0.001 inch (about 25 µm) of coating adds about 0.044 lb of zinc per square foot. For the steel buyer the coating is a modest addition to the price of the steel itself.

Sources: V&S Galvanizing

4. Aluminium, plastics and paint

Substitution · Weak · Other materials replace galvanised steel or zinc coatings

Carmakers can use aluminium or plastics instead of galvanised sheet, and paint, aluminium alloy or plastic coatings can protect steel instead of zinc.

Substitution is real but slow, because galvanising is cheap and long-lasting for structural steel. The bigger risk to zinc demand is less steel used outdoors, not a better coating.

Sources: USGS

For investors

Key learnings

  1. Zinc demand is mainly a function of galvanised steel output, so construction, infrastructure and car production are the drivers to watch.
  2. Prices of the two metals hardly move together; the link runs through physical volumes and galvanisers' costs.
  3. Zinc is 35 to 50% of a galvaniser's operating cost, so galvanising margins swing with zinc prices.

What to track

  • LME zinc cash price: Sets the main input cost for galvanisers and coated steel premiums (Daily · LME)
  • Galvanised and coated steel output: Main driver of zinc consumption (Monthly · Joint Plant Committee (India) and worldsteel)

For policymakers

Key learnings

  1. Infrastructure and housing programmes that use galvanised steel raise zinc demand directly.
  2. Thicker or more widely required corrosion protection extends asset life at the cost of more zinc per tonne of steel.
  3. India mined about 7% of world zinc in 2025, giving its coated-steel industry a domestic supply base.

What to track

  • India refined zinc output and imports: Self-sufficiency for galvanising (Monthly · Ministry of Mines and DGCIS)
  • Galvanised steel use in public infrastructure: Zinc demand from state programmes (Yearly · Ministry of Steel)

India

India mined about 870,000 t of zinc in 2025, about 7% of world output, and Hindustan Zinc held about 75% of the primary zinc market in 2022-23, supplying the coated steel, construction and car industries.

Sources

  1. Mineral Commodity Summaries 2026: Zinc, USGS (2026)
  2. Annual integrated report FY 2022-23: Zinc, Hindustan Zinc (2023)
  3. Corrosion protection using zinc, Wedge Group Galvanizing (2024)
  4. Economic analysis of excessive coating thickness in hot-dip galvanizing operations, V&S Galvanizing (2019)
  5. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)