Global demand for refined zinc metal will exceed supply in 2023 with the extent of the deficit currently forecast at a modest 45,000 tonnes, as per the global body ILZSG.
Experts feel, in India zinc will be a supply-driven market, while the demand for lead is going to rise in the medium term due to new vehicles and replacement. The output of critical raw materials such as lithium, cobalt and titanium is on the rise in the past 10 years amidst heightened supply risk as the production is concentrated in a few countries.
Demand for zinc in India is set to go up 7-8 per cent annually in the coming years with a steady rise in usage of galvanised steel by various sectors, especially railways and infrastructure.
Some of the key sectors such as Indian Railways, passenger carmakers, sanitary ware, solar towers, construction and highways sectors have increased their consumption of galvanised steel in recent years. The Indian Railways, which consumes about 18% of India’s annual steel production, has decided to explore only galvanised steel wherever it is electrifying its tracks.
Zinc is one of the most sought-after metals in the world and usage of zinc is only going to increase due to its properties to protect steel and build a robust infrastructure.
In India as well, the government has a strong focus to build infrastructure that can last for long. Due to severe climate fluctuation, pollution, humidity and exposure, the life of steel is not protected. A pinhole of exposure is enough to cause rusting leading to corrosion later. Indian railways, highways, coastal infrastructure all use steel.
Railways is the largest consumer of steel but also spends a substantial amount in maintenance and replacement of rails or fishplates due to corrosion.
Now, it is all set to use galvanised steel in future projects. Similarly, the auto sector is getting sensitive to the use of galvanised steel in different parts of the car body. The coastal structures have tremendous safety issues if during the construction, galvanised TMT rods are rarely used.
Further for lead, over the medium period, the growing demand from telecommunication and data centers, coupled with the increasing applications in industries such as railways, are expected to drive the market.
On the other hand, alternate technologies, mainly lithium-ion, are expected to disrupt the market growth, primarily owing to their decreasing costs and technical advantages.
New advancements in lead-acid battery technologies are expected to create immense opportunities for the Indian
lead-acid battery market.ire and cable market is projected to benefit from the rising investments in renewable energy which mean that the energy sector is anticipated to become one of the highest consumers of copper cables and wires. The increasing population and rapidly expanding industrialization have caused a tremendous rise in the demand for electricity and power. In the coming years, non-renewable sources of energy may not be able to cope with the constantly increasing requirements which is why governments along with international and regional bodies are emphasizing on investments in renewable sources.
One of the key challenges that the copper wire and cable industry players could experience is in terms of frequently changing prices of raw materials, especially copper. Since it is a commodity for the commercial market, its price is dependent on several factors and may change as the political and economic situations of the regions dealing in the trade keep changing. Navigating through these price fluctuations could impact the overall revenue garnered by the market players.
In India, the Union Budget 2022-23 presents an effective roadmap for Aatmanirbhar Bharat. It is most encouraging to see that the effective capital expenditure of the government is estimated at Rs 10.68 lakh crore in 2022-23 at about 4.1 percent of GDP showing an increase over the last FY.
Such a substantial focus on infrastructure spending augurs well for the wires and cables industry which had been seeing a demand contraction for the past two years.