SMM

According to SMM survey data, although galvanizing consumption still accounted for nearly 70% of zinc downstream consumption in 2024, actual consumption pulled back. The actual consumption of zinc oxide and die-casting zinc alloy also declined. Overall, zinc downstream consumption showed no growth in 2024. Can 2025 emerge from the shadow? We analyze from the end-user perspective.

Real Estate Sector. Despite the introduction of multiple favorable real estate policies domestically in 2024, NBS data showed that from January to October 2024, the cumulative YoY decline in newly started construction area was 22.6%, while the cumulative YoY decline in completed area was 23.95%. The effects of related policies may not yet have materialized. Additionally, zinc downstream consumption is more likely to be used in the completion phase of real estate projects, and weak completion data continued to drag down zinc demand in 2024. Looking ahead to 2025, as time progresses, the previously introduced favorable real estate policies are expected to gradually take effect, potentially supporting zinc downstream consumption.

Infrastructure Sector. NBS data indicated that from January to October 2024, the cumulative YoY growth in fixed asset investment was 3.4%, showing a clear trend of stabilized overall investment growth. This year, the infrastructure sector has consistently supported domestic zinc consumption. In 2025, with the gradual implementation of special bonds and incremental policies, related construction projects are expected to gradually be realized. Meanwhile, the recovery in the excavator market may signal that, over time, the development of the infrastructure sector could provide more growth opportunities for zinc consumption.

Automotive Sector. In the automotive industry, zinc consumption is mainly related to galvanized sheets used in vehicles and zinc oxide used in tires. CAAM data showed that from January to November 2024, China's automobile production and sales increased cumulatively by 2.9% and 3.7% YoY, respectively. For zinc oxide, the growth in automobile production and sales drives related demand. However, the demand for galvanized sheets is more concentrated in certain mid-to-high-end fuel vehicles. From January to November 2024, the production of traditional fuel vehicles in China declined by 13% YoY, while the share of new energy vehicles continued to rise. This year, the automotive industry may have limited impact on driving galvanized sheet consumption. Looking ahead to 2025, overall automobile production and sales are expected to decline MoM, and the high proportion of new energy vehicles may continue to pressure zinc consumption.

Home Appliance Sector. NBS data showed that from January to October 2024, the cumulative production of washing machines, sales of refrigerators, and sales of air conditioners increased by 6.7%, 8.5%, and 8.2%, respectively. This year, the domestic production of the three major white goods grew, driven by two factors: strong domestic home appliance exports in 2024 and the sustained impact of trade-in policies and various subsidies, which boosted related zinc consumption. For 2025, due to uncertainties in the global trade environment, whether the growth momentum of home appliance exports can be maintained remains to be seen.