India's zinc market realignment: FY'25 sees higher output, scrap surge, import decline

• South Korea remains top exporter
  
  
• Production may cross 1 mnt in FY'26
  
  

In FY'25, zinc ingot imports decreased by 5.2% to 206,783 tonnes (t) compared to 218,106 t in FY'24. The decline was primarily driven by increased domestic zinc production capacity coming online during the fiscal year, especially from major producers like Hindustan Zinc Ltd (HZL), which reduced dependency on imports.

Additionally, softer demand from the galvanizing and infrastructure segments in Q1 and Q3 of FY'25, due to project delays and high zinc prices, further contributed to lower import volumes. Imports in March stood at 17,479 t, showing a marginal recovery as downstream sectors began restocking toward the fiscal yearend.

Country-wise imports in FY'25

South Korea remained the dominant supplier, though volumes dropped significantly by 28% to 102,094 t from 141,585 t. This decline is linked to lower offtake in H1FY'25 amid high inventories and weak downstream demand. Japan, the second-largest exporter, also saw a 13% drop to 47,804 t, despite a brief surge in Q1FY'25.

Notably, Spain entered the Indian market strongly, shipping 16,815 t, likely due to competitive pricing and excess EU supply. Australia marginally increased its shipments to 7,522 t, up from 5,389 t in FY'24. Singapore emerged as a minor but new supplier at 7,070 t.

Imports from Myanmar and North Korea ceased entirely, reflecting supply disruptions or changing trade preferences. Overall, diversification in sourcing increased while legacy suppliers saw reduced volumes, indicating a strategic shift in India's procurement patterns.

Zinc ingot production in FY'25

India's zinc production rose significantly in FY'25, reaching 0.83 million tonnes (mnt), up from 0.6 mnt in FY'24an increase of nearly 38%. This growth was driven by capacity optimization and higher plant utilization by key players like Hindustan Zinc Ltd (HZL).

Output remained steady throughout the year, with strong production levels in Q1 and Q4. In FY'25 (till March), zinc production totalled 0.22 mnt, showing a stable run rate in Q1FY'25, in line with the previous year's monthly average. The full-year production for FY'26 is expected to remain strong, supported by continued operational efficiency and planned capacity expansions, reflecting India's push for domestic self-reliance in zinc supply.

Zinc scrap imports

In FY'25, India's zinc scrap imports rose by 26% to 82,123 t, compared to 65,205 t in FY'24, reflecting higher demand from galvanizers and secondary zinc processors. March FY'25 saw imports at 8,656 t, up from 6,099 t.

The United States remained the top supplier at 9,128 t, up 4%, while shipments from Netherlands surged by 91% to 8,136 t, likely due to better logistics and lower-grade scrap availability. Imports from Saudi Arabia also grew strongly by 55% to 7,360 t, supported by increased regional scrap generation. Imports from the UAE and Germany stood at 5,292 t and 4,785 t, respectively, both witnessing modest gains. Thailand (4,670 t) and Malaysia (4,626 t) also expanded their presence, particularly in Q3FY'25.

The sharp rise in shipments from Europe and the Middle East, and greater supplier diversification, indicate strong import appetite amid firm domestic demand and stable international prices.

On the LME, zinc prices experienced notable volatility during FY'25. Prices peaked at $3,284/t in October, marking a 20-month high, amid tight concentrate supply and speculative activity. However, the market shifted to surplus in early 2025, prompting a 13% correction, with prices easing toward $2,300/t by March.

Despite the swings, the average LME zinc price declined modestly by 4% y-o-y, from $2,534/t in FY'24 to $2,433/t in FY'25, helping ease procurement costs for buyers. Meanwhile, LME zinc stocks increased by 12%, from 46,750 t (March 2024) to 52,430 t (March 2025), reflecting softer primary demand and improved scrap availability.

In FY'25, Saves grade zinc scrap imports rose to 58,551 t, up from 46,199 t in FY'24 a growth of around 27%. Monthly inflows were particularly strong in January (6,002 t) and March (6,609 t), aligning with peak restocking phases.

Score grade scrap also witnessed significant growth, surging over 61% to 15,037 t in FY'25 from 9,616 tonnes in FY'24. This jump reflects improved collection and supply chain efficiency, especially in Q2 and Q4, with imports peaking at 2,131 t in December and remaining above 1,500 t in multiple months. The rising preference for Score indicates its increasing utility in galvanizing and alloying applications.

Market outlook

India's zinc production is set to grow steadily, supported by Hindustan Zinc's capacity expansion to 2.5 mnt by 2027 and strong infrastructure demand. Output could surpass 1 mnt by FY'26, aided by policy support, import substitution, and sustainable technologies driving efficiency, making India more self-reliant and globally competitive.