* Solar market remains a driving force of growth
* Diversity of markets putting industry on growth track
By Chris Kelly
RANCHO MIRAGE, Calif., Feb 28 The North
American galvanizing industry looks poised to grow by 2 to 3
percent in 2012, as it extends its recovery from 2008's global
financial crisis, executives said at the International Zinc
Association's 2012 conference.
Building on a relatively strong performance in 2011, where
total production of galvanized products in North America grew by
an estimated 13 percent, the industry's outlook continued to
brighten, with the help of some key markets, particularly solar,
From the posts and outside frames of solar panels to the
transmission lines needed to connect newer solar and wind fields
to the electrical grid, the alternative energy market has and
will continue to offer "significant tonnage" for virtually every
galvanizer, keeping the industry on a positive growth track this
year, said Tim Pendley, senior vice president and chief
operating officer with AZZ Inc.
"I anticipate an overall growth rate of 2 to 3 percent in
the coming year. The solar market was and remains the driving
force for growth in 2011, and is projected to remain a
significant player through 2016," he said.
Pendley estimated that nearly 4 percent of the 2011
galvanized steel products went into the solar market.
In the aftermath of 2008's global economic downturn --
considered to be the worst financial crisis since the Great
Depression of the 1930s -- the North American galvanizing
industry was hit hard, dropping 15 percent in 2009 and 5 percent
Phillip Rahrig, executive director of the American
Galvanizers Association, said 2012 has already gotten off to a
"Galvanizers have come out of the shoot very strong. Guys
are very bullish for this year ... because 2011 was a relatively
good year in pretty much horrible economic condition," he said.
"Most companies have a lot of cash, but the question is
whether they are going to spend it here in North America or
spend it elsewhere.
"A lot of it has to do with whether they see the U.S.
economy growing faster than other countries around the world,"
A recent stream of generally upbeat data has shown that the
U.S. economy is beginning to show some signs of life.
A pickup in manufacturing activity in January, coupled with
better-than-expected employment and housing numbers all point to
a healthier economic condition this year.
The U.S. economy grew at a 2.8 percent annual pace in the
last three months of 2011, its fastest rate since the spring of
About 30 percent of zinc consumption in North America is
used for galvanizing, a process in which fabricated and
structural steel, castings, or small parts are immersed in
molten zinc, resulting in a metallurgically bonded alloy coating
that protects the steel from corrosion.
Aside from the alternative energy markets, demand from some
traditional markets like original equipment manufacturers (OEMs)
and bridge and highway has offered very good growth
opportunities for the industry, Pendley said.
"The bridge and highway market is one of the bright spots.
Over the next 5 to 10 years, I anticipate that this market will
grow to 15 to 20 percent of consumption," he said.
The agricultural market is an up-and-coming market that will
likely be another growth story, he said.
"With the decline of the family farm, we are seeing that
corporate farming is recognizing the loss of capital caused by
corrosion, and we are seeing an increase in inquiries as to the
lowest cost of ownership," he said.
"I estimate this market will have significant opportunity
for us," he said.
Nearly four years removed from 2008's economic problems, the
outlook for the U.S. economy in 2012 is looking better.
The U.S. Federal Reserve estimated 2012 economic growth of
roughly 2.5 percent, in line with the growth estimates for the
North American galvanizing industry.
"Hot Dip Galvanizing is a GDP-driven industry," Pendley
"We have suffered through economic turmoil in the past
several years, and although we have not returned to the
high-water mark in 2007, the diversity of markets that we serve
has minimized the negative impact and has put the galvanized
industry back into a growth mode."