Domestic demand for zinc continues to trail supply, with the surplus being exported. Although the near-term domestic demand outlook is moderate owing to a slowdown in the key consuming sectors, the long-term demand outlook remains favourable.
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Zinc is the fourth widely used metal after steel, aluminium and copper in the world. Mainly used for galvanizing steel, zinc is also used in alloys, batteries, rubber, paint, electroplating metal spraying and several other sectors. Due to its resistance to non-acidic atmospheric corrosion zinc is instrumental in extending the life of buildings, vehicles, ships and steel goods and structures of every kind.
Zinc is a bluish-white lustrous metal. It is normally covered with a white coating on exposure to the atmosphere. Zinc dust is flammable when exposed to heat and burns with a bluish-green flame. Zinc also exists in many compounds.
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Zinc has a role in normal human growth, taste, and sperm development, but exposure to high levels of zinc through inhalation, ingestion, and dermal contact can cause adverse health effects.
Zinc is used for alloys, electroplating, metal spraying, electrical fuses, batteries, rubber, paint, glue and matches. Zinc is registered as a fungicide, herbicide, and rodenticide.
The primary stationary sources of zinc are electric services, petroleum refining, crude petroleum and natural gas extraction, manufacturing of fabricated rubber products, manufacturing of fabricated metal heating and plumbing products, and manufacturing of inorganic chemicals.
Indoor sources include infiltration of outdoor air, smoking, cooking, and other indoor sources. The average indoor concentration of zinc is normally slightly higher than the outdoor level. Zinc occurs naturally in the earth's crust.
The rapid growth in the Asian region is mainly the trigger for rise in global zinc consumption. Refined zinc output globally is expected to grow by a moderate 3 percent to 10.6 million ton in 2006; it may further move up to 11.0 million ton in 2007. Major producers in Asia are enhancing capacity to in tune with the demand for zinc in the coming years.
India is one of the fastest growing regions of zinc consumption in the world. Indian zinc demand is likely to grow 12-15 percent per annum compared with the global average of 5 percent. Growth in steel sector is the main factor behind the rise in domestic consumption as 70 percent of India’s zinc use is accounted by steel galvanizing.
India hopes to become self reliant in zinc production by 2010. Industry estimates place that India’s annual production has to touch 14 ton per year by 2020 if it has to sustain 10 percent growth till 2010 and at 7 percent rate thereafter.
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The Indian zinc industry entered its transformation phase with the privatisation of the largest zinc producer, Hindustan Zinc Ltd, in favour of the Sterlite group in April 2002. The domestic zinc industry is now completely under the private sector and is in the midst of a serious expansion programme.
Even if one assumes that zinc demand grows by 10 per cent till 2010 and at slower 7 per cent thereafter, India would require zinc capacity of 14 lakh tpa by 2020, in order to be self-reliant. The next round of large capacity additions would, therefore, be warranted from 2008 onwards.
Factors Influencing Zinc Market
**Changes in inventory level at LME wharehouses
**Economic growth rate of major consuming countries
**Global growth and demand in major consuming industries
**Prices of the alternative metal(s)
**Participation of funds