Zinc Oxide Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Zinc Oxide

• Factors driving zinc oxide demand growth include increasing demand for innovative electronics and cosmetic products
• APAC is expected to lead the demand and supply markets, with capacity additions expected in the next two years
• The major zinc oxide supply market and share: APAC: 58 percent, China: 16 percent, North America: 12 percent, WE: 17 percent, Others: 13 percent.
• The top global zinc oxide supplier are U.S. Zinc Corp. | Umicore | Chem Trade | Silox SA | HakusuiTech Co., Ltd.
• Zinc oxide price outlook (Q3 2019 vs. Q2 2019): 8-10 percent decrease in the APAC region.
• Zinc oxide producers face the following opportunities and challenges: Opportunities- Improving demand from electronics and cosmetic applications. Challenges - Volatility of feedstock prices and negotiation power with suppliers.

Demand Market Outlook

• The global zinc oxide market has surplus supply, and it is expected to remain same for the next 2 – 3 years
• Zinc oxide demand will continue to be driven by the tire segment and innovations in electronics and cosmetics, owing to economic growth in Brazil, China, and India, and it is expected to grow at a CAGR of approx. 5 percent through 2022

Impact on CPG

• The CPG industry accounts for a very small share of the downstream demand
• CPG buyers are low volume buyers of zinc oxide compared to rubber, ceramics, and electronics buyers
• As a result, CPG buyers have less leverage during contract negotiations and have to contend with higher prices and supply unavailability during tight supply situations

Global Market Size: Zinc Oxide

• The global market size is estimated at $3.6 billion in 2018, and it is expected to grow at a CAGR of 6 percent through 2022
• Factors driving this growth include increasing demand for innovative electronics and cosmetic products requiring zinc oxide, especially from the developing economies, like India, Brazil, and China
• The market size of zinc oxide, in terms of value, is projected to reach $4.70 billion by 2022, and the global market size for zinc oxide is projected to register a CAGR of 6.0 percent between 2017 and 2022
• Rubber, chemicals, and agriculture, together, accounted for the largest share of the zinc oxide market in 2017
• APAC accounted for the largest share of zinc oxide in 2016, and it is projected to be the fastest growing market, in terms of value, between 2017 and 2022. Growth is attributed to the increasing automotive sales in countries, such as China and India

Global Capacity–Demand Analysis

• Expected capacity additions support tremendous growth across the globe, in innovative applications, like electronics and cosmetic products
• Buyers are recommended to secure their supply with medium-scale suppliers, in long-term contracts, based on zinc prices

Market Outlook 

• Capacity: Capacity additions, planned by producers in China, have been temporarily stalled, owing to the weak economic scenario. 
• Demand: Global zinc oxide demand is expected to increase at approx. 5 percent CAGR through 2022, especially from the rubber industry in the developing countries
• Operating Rates: Global average operating rates at zinc oxide plants are expected to be around 85 percent. However, operating rates in China are currently ranging between 50 and 55 percent, owing to weak demand. These operating rates are expected to increase up to 70 percent, driven by an expected increase in demand
• Supply Security: Overall, no supply issues are expected in the zinc oxide market until 2021, as capacity additions are in place to meet the growing demand

Engagement Outlook

• Low volume buyers are recommended to have long-term contracts with zinc oxide manufacturers, as they have lower bargaining power
• Spot and contract price mix is the preferred mode of engagement, with a 40/60 ratio

Market Overview

The booming automobile segment in APAC may result in a supply crunch for CPG companies, especially based on its seasonality. By 2020, the electronics and ceramics segment is expected to overshadow rubber and chemical segments’ demand share of zinc oxide. Developing countries, including India, South Korea, Indonesia, etc., are the key growth drivers of demand in the APAC region The automobile segment is picking up, increasing demand for zinc oxide manufacturers in India and South Korea. The top six zinc oxide producers hold close to 95 percent of the market share, giving little leverage to buyers. The zinc oxide market price decreased by 3.4 percent in August 2019 M-o-M due to a decrease in raw material zinc ingot prices. The consumption of zinc oxide from the downstream automobile industry is expected to be medium to low. This is expected to have an impact on zinc oxide price in the region.

Why You Should Buy This Report

The report gives the cost breakdown and zinc oxide market price analysis. It lists out the major zinc oxide suppliers and gives SWOT analysis of Zochem Inc, Umicore, etc. It provides information on the best sourcing models, pricing formulas and contract models. The report gives Porter’s five force analysis, the industry drivers and constraints and industry trends and innovations.