Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

In India, die casting companies rued about low orders for zinc and relatively higher aluminium die cast orders post March. Change in demand pattern from auto sector is majorly impacting the consumption of zinc and aluminium alloys used for die casting. 

There is also a call for substituting Zamak made from primary material to Zamak made from scrap owing to price difference. 


Most Indian die casters use zinc alloy made from primary zinc while some in Uttar Pradesh and Gujarat use secondary zinc alloy ingots. 

Zinc alloy made from primary zinc or, as the locals call it, virgin metal offers better quality and finish to the final product. Die casters mostly cater to the auto industry – a sector that was ailing even before the COVID-19 pandemic and has been suffering since.


Auto sector’s preference

Die casters told Davis Index that demand for zinc die cast has fallen since March mainly due to auto companies substituting zinc die cast parts with aluminium die cast products for BS-VI vehicles. Aluminium die cast parts offers more strength and weight less comapred to zinc. Demand for zinc die casting is steady from infrastructure sector but still less compared to expected levels due to a lull in constructions, said die casters in Mumbai.


Auto sales have started picking up with growth being witnessed in May and June, and prediction for July is also positive compared to prior months. Even though auto sales compared to prior year has decreased, COVID-19 has lodged us in an unusual year which is not comparable with any other historic year. June auto sales improved by 195pc from May. 


The auto sector is getting a push from the rural segment which registered higher economic growth fuelled by government’s stimulus packages and a projection of healthy monsoons. Major auto companies have hinted two-wheeler growth and farm sector growth reviving at a much faster rate than passenger cars. Nonetheless, demand will be better in Q3 and Q4 owing to festival season when consumer spending increases. 


Zamak may also be substituted by Zamak made from scrap. Secondary zinc alloys maybe used by some die casters going ahead as prices of Zamak series is quite high at around Rs193,000-195,000/mt del India consumer while prices of secondary zinc ingots are around Rs163,000-165,000/mt del India consumer. 


Demand for secondary Zamak may increase in 2020 as die casters reported heavy losses during COVID-19. Furthermore, some may choose to use aluminium ingot, ADC 12 for die casting but its price may go up due to dearth of raw material.

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