Japan Metal Daily: Japan’s domestic zinc production in FY’24 has dropped to its lowest level in 59 years, falling below 500,000 tonnes (t) for the second straight year. The decline is driven by sluggish demand for galvanized steel sheets and copper products, reflecting ongoing weakness in key sectors like construction and automotive.
Zinc production in FY’24 is projected at 450,000-460,000 t, marking the lowest output in 59 years since 1965’s 433,000 t. This reflects a significant decline of about 40% compared to the 732,000 t produced in FY’91, the peak of the Heisei era, and nearly 30% less than levels recorded two decades ago.
Domestic zinc demand in FY’24 remained weak, staying in the low 300,000-ton range below the previous year for the third consecutive time. Compared to a decade ago, demand has dropped by tens of thousands of t. Sales of key products declined significantly: galvanized steel sheets fell by 20%, copper products by nearly 40%, and zinc die-cast alloys by around 30%.
In response to weak domestic demand, Japan increased zinc exports starting in FY’20 following the COVID-19 pandemic. However, exports were reduced in FY’24 due to production adjustments at smelters. Exports reached 177,000 t in FY’20 and 162,000 t in FY’22-23, representing over 30% of total production. By February FY’24, exports totalled 104,000 t, accounting for 25% of production, and the export ratio is expected to remain below 30% for the rest of the year.
Zinc production in FY’25 is expected to remain below 500,000 t for the third consecutive year, following Toho Zinc’s withdrawal from zinc smelting from ores at the end of FY’24. While automobile production is projected to recover, the construction sector is anticipated to face challenges due to labour shortages and other factors, further impacting domestic demand for zinc.
Zinc smelters in Japan are grappling with rising costs, particularly from high electricity prices, and worsening conditions for ore procurement. To ensure a stable zinc supply vital for rust prevention in steel sheets and the functioning of the smelting and refining network there will likely be a stronger focus on boosting the competitiveness of domestic smelters and fostering greater demand for zinc in the coming years.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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