HONG KONG, Aug. 14 -- Higher output of Chinese galvanized steel in the first half of the year, due to the growth in the local automobile and construction sectors, resulted in increased zinc consumption, market analysts said Thursday.

    Key Chinese zinc producer Hongda Group said domestic zinc demand in the summer, which is a slack season, was better than usual on the state's stimulus package.

    Zinc is used in processing galvanized steel. China produced over 8.2 million mt of galvanized steel in H1, up 13% year on year.

    China produced 5.977 million automobile units in H1, up 15% year on year, according to the China Association of Automobile Manufacturers.

    According to local media reports the country's galvanized steel stocks in August so far, were less than the 930,000 mt in June on stronger domestic demand.

    China's zinc consumption during the January-May period this year hit 1.93 million mt, up 23.3% year on year, state statistics showed.

    Market insider expects China's zinc consumption to grow by 4% this year compared
with last year. China's zinc consumption in 2008 was 3.7 million mt, up 2.5% from 2007, state statistics showed.

    Galvanized steel accounted for 52.5% of the country's zinc consumption last year, with diecast alloy accounting for 16.8%, brass and battery 20% and zinc oxide and others, the remaining 10.7%.

    China produced 2.275 million mt of refined zinc during the first seven months of this year, up 0.9% year on year, state statistics showed.

    (Source: Platts)