How Will the Continued Investment in Ultra-High Voltage in 2025 Contribute to Zinc Consumption? [SMM Analysis]

SMM February 21 News:

In 2024, the State Grid Corporation of China headquarters plans to conduct ultra-high voltage (UHV) project procurement in 26 batches, including 8 batches of equipment procurement, 6 batches of material procurement, and 12 batches of service procurement. By the end of 2024, cumulative tenders for UHV equipment reached 27.16 billion yuan, while tenders for UHV materials amounted to 7.53 billion yuan.
 
In 2024, the State Grid accelerated the advancement of major power grid projects, initiating projects such as the 1,000 kV Aba–Chengdu East UHV AC and the ±800 kV Gansu–Zhejiang and Shaanbei–Anhui UHV DC projects. Several UHV AC projects, including the 1,000 kV Sichuan and Chongqing, Wuhan–Huangshi–Nanchang, and Zhangbei–Shengli, were successfully commissioned. Meanwhile, the world's largest installed capacity pumped-storage power station, the Hebei Fengning Pumped Storage Power Station, achieved full-scale power generation.
As of now, the State Grid has completed the construction of 22 UHV AC and 16 UHV DC projects, totaling 38 projects. This momentum is expected to continue into 2025, with a focus on optimizing the main power grid, strengthening the distribution network, and supporting the high-quality development of new energy. Key projects planned for commencement include the Shaanxi–Henan UHV and the Shandong Zaozhuang and Zhejiang Tonglu pumped-storage power stations. These initiatives will expand effective investment, drive the development of upstream and downstream industry chains, and play a greater role in ensuring power supply and energy transition.
UHV projects remain the backbone of power grid investment, with 2025 expected to witness a peak in UHV project approvals and commencements. Plans include the approval of 4 DC and 4 AC projects, with UHV investment projected to reach 112 billion yuan, up approximately 34% YoY. DC projects include power transmission corridors such as South Xinjiang to Sichuan and Chongqing, Gansu Badain Jaran Desert Base to Sichuan, Western Inner Mongolia to Beijing-Tianjin-Hebei, and Southeastern Tibet to the Guangdong-Hong Kong-Macao Greater Bay Area.
China Southern Power Grid plans to invest 175 billion yuan in fixed assets in 2025, focusing on power grid construction, new energy development, equipment upgrades, and the cultivation of strategic emerging industries to promote power security, energy transition, and industrial upgrading.
Additionally, the Hainan 500 kV main grid project, with a total investment of 5.7 billion yuan, has surpassed the halfway mark in construction progress. The first 500 kV line has been fully connected and is expected to be fully completed by 2025.
 
In 2025, galvanizing for power grid steel towers will remain the primary growth driver for galvanizing. According to SMM estimates, the demand for steel towers will be around 1,166 mt, with zinc consumption at approximately 440,000 mt, up about 8% YoY compared to 2024. Most tenders are expected to begin in February, but it will take some time to be implemented by galvanising enterprises.