← Business Metric: Industry Specific (Industrials & Materials) (all topics)

Zinc (LME) coating cost

Inputs, Costs & Commodities · Feedstock & raw material

What it is

Zinc for galvanising is priced off the London Metal Exchange, so a coater's second-largest input after steel moves with a global benchmark it cannot influence

Coating weight per square metre is specified by the customer, which fixes zinc consumption per tonne of output

Impact on industries

  • Adds a second uncontrolled commodity exposure on top of steel, and the two do not move together, so hedging one leaves the other open
  • Coating thickness is contractually specified, so a coater cannot reduce consumption in response to price without breaching specification
  • Galvalume and thinner high-performance coatings reduce zinc intensity, giving a technical route to lower exposure
  • Pass-through works in stable markets but lags in sharp moves, so timing rather than direction determines the earnings impact

Industries affected

Steel- CRC coils,sheets Non-Ferrous Metals-Primary & Mining Consumer Durables-Home Appliances & Lighting

Related topics

Nickel & ferrochrome surchargeBusiness Metric: Industry Specific (Industrials & Materials) GP/GC galvanised vs galvalume (Al-Zn) coatingCritical Product/Equipment/Process: Metals, Mining & Materials Colour-coated steel / PPGI (pre-painted galvanised iron)Critical Product/Equipment/Process: Metals, Mining & Materials Spread - metal conversion charge (tolling)Business Metric: Industry Specific (Industrials & Materials) Spread - HRC to CRC (cold rolling)Business Metric: Industry Specific (Industrials & Materials) Spread - cable conductor (copper vs aluminium)Business Metric: Industry Specific (Industrials & Materials)