Auto Industry Use of Zinc Is Forecast to Grow

Khodrocar - While many commodities are struggling with supply chain problems, the zinc industry, which provides the ingredient needed to galvanize steel auto bodies, has been able to minimize its disruptions. Design News spoke with Andrew Green, the Executive Director of the International Zinc Association, to hear about that industry's contributions to the auto industry and its potential for more to come.

Andrew Green: The auto industry is certainly one of the key areas for big markets. It represents about 14 percent of the overall use of zinc going into an application and that's mainly from galvanizing steel for protection from corrosion, also die-cast parts and zinc oxide in the tires, and so forth.

Andrew Green: The main part would be with the coiled steel, the continuous steel that's produced by the steel companies for use in the auto body itself. If you look at the US, Canada, Europe, and places like that, only about 90-to-95 percent of those auto bodies use galvanized steel sections and corrosion. The other sector that's growing fast as you well know, is the EV market.

Andrew Green: For batteries, lithium has the overwhelming share with EVs and of course lead is used as a secondary backup for that. There is a great market for zinc batteries with energy storage. But that's a whole other sector. One of our companies does, however, have some great new technology that's an opportunity for zinc batteries to be used with EVs. But I'd say ‘stay tuned’ for that.

Andrew Green: It's similar to the other cars. There was an early point where there was some concern about EVs switching over to some other material. Tesla, for example, started off with an aluminum body. And when the Tesla Model 3 came out they realized with the increased mass from adding more battery capacity to increase the range that you need to have the extra strength that's provided by high-strength galvanized steel. So for Model 3, Tesla switched to galvanized steel. Pretty much every new EV model that comes out from BMW, Mercedes, or what have you, has gone with the high-strength galvanized steel for long-term protection and sustainability assets.

Andrew Green: That's one of the very positive aspects. Right now, globally, there is a small supply shortage that's going on for a number of reasons, the high energy prices in Europe, for example, and some other things like that.

But zinc is produced in a number of different countries around the world. That's about a 14 million-ton market. And unlike other materials, such as lithium, with the battery market, for example, it's a very sustainable supply chain for these different applications.

Andrew Green: The U.S. uses around one million tons of zinc in various applications, whether it's construction or automotive, or what have you. A little bit over 80 percent actually comes from imports. That would include places such as Canada, Asia, Australia, Peru, and Mexico, so there is a large import situation going on there.

And although there's a fair number of mining activities going on in the United States, there are only three spots that do the refining of the zinc. It's available for use with galvanizers and steel mills and so forth. So that's where there's probably under capacity from that standpoint.

Andrew Green: The United States Geological Survey adding zinc to the critical minerals list is a key first step. They could also encourage corporate investment in exploration incentives. Canada has done that, and added zinc to its critical minerals, listen has an incentive, for example, for exploration by companies, they could put in financial incentives for grants and loan guarantees to help with the capital expenditure with these investments. And then a more efficient permitting process would be very helpful for the industry. It can take as long as ten years right now, from start to finish. And I know, a couple of projects that are ongoing right now in the states that are being held up by the permitting process.

Andrew Green: I think it's always important, whatever material you're looking at, to understand and work with the authorities on the best available science to understand the fate and effects of that material. So zinc's situation is not different than any other. From that standpoint. I am proud to say that the zinc industry and IZA worked very closely with groups like the U.S. Environmental Protection Agency and the Canadian Environmental groups in Australia and so forth.

We have a long history and credibility of working well with these groups and helping to ensure that that's available science to us. So I can tell you that we've been focusing very hard with our members in the zinc industry to ensure that the zinc is produced in a sustainable manner, our companies have taken a number of steps to help ensure that that's happening. 

Andrew Green: We’re forecasting growth by the year 2030 of around 22 percent. And that's mainly not from the U.S. side of things. If you look at global average usage, in automotive is around 90-to-95 percent for the galvanized steel in bodies. But if you look at places like India, and China, the use of galvanized steel auto bodies is around 20 percent. So, a huge discrepancy compared to the global average. In China, it's only around 50 percent.

So you take those two economies and the buying sector there that's growing, that low intensity of use of galvanized steel in the auto body sector represents a big potential for growth and that's why our projection would be around