China's refined zinc production rose by more than 600,000 tonnes in 2025, according to SMM data, driven by a wave of smelter expansions that added 430,000 tonnes of new capacity. New plants including Jiyuan Wanyang and Xinjiang Huoshaoyun ramped up through the year, pushing national output to record levels. In the first nine months of 2025 alone, Chinese refined zinc output rose 12% year-on-year (: SMM, Antaike, Reuters, Nov 2025).
The expansion reversed 2024's contraction, when Chinese output fell 3.6% as smelters struggled with tight concentrate supply and negative margins. The difference in 2025 was improved concentrate availability from global mine ramp-ups, which allowed Chinese smelters — with their newer, larger, and more efficient plants — to run at higher utilization rates than their Western counterparts (: Antaike, SMM, Jul 2025).
The critical detail for global buyers: this metal is not leaving China. Social inventories of refined zinc in China remain above 250,000 tonnes (: SMM, May 2026). ILZSG data shows that while Chinese refined output grew 8.4% YoY in the first ten months of 2025, global output grew only 2.9%, because output outside China fell 2.2%. ILZSG expects Chinese refined output to grow a further 3% in 2026, while global output grows only 1.4% — the divergence widens (: ILZSG via Reuters, May 20, 2026).
The consequence: the global zinc market has split into two. China is steadily approaching self-sufficiency in refined zinc, with its smelter capacity now exceeding its consumption requirements. The rest of the world is increasingly dependent on a Western smelter fleet that is aging and under-invested. This structural divide is the fundamental reason ILZSG's 2026 balance flipped from a 271,000 tonne surplus to a 19,000 tonne deficit (: ILZSG, SMM).
The two-speed zinc market means LME pricing will increasingly diverge from SHFE pricing. The LME-SHFE arbitrage window remains firmly closed as of May 2026, meaning Chinese metal is not flowing westward at any meaningful volume.
Do not assume that record Chinese output will relieve tight Western supply. China's zinc surplus is a domestic phenomenon. If you are buying zinc for delivery outside China, the relevant market is the ex-China market — and that market is structurally tight. Watch the LME-SHFE arbitrage window: when it opens, it signals Chinese metal could flow westward. That window remains firmly closed as of May 2026.