The ILZSG's preliminary data, published in early 2026, revealed that the global refined zinc market registered a deficit of 33,000 tonnes in 2025 — a stark contrast to the 85,000-93,000 tonne surplus the group had forecast at its October 2025 meeting. Global refined production rose 2.1% in 2025, but demand grew 1.9% to 13.86 million tonnes, and the margin was simply too thin to accommodate the wave of smelter outages that hit Western producers. (FACT: ILZSG preliminary data, February-April 2026)
The 2026 outlook has shifted even more dramatically. At the October 2025 meeting, ILZSG forecast a 271,000 tonne surplus for 2026, based on expectations that global refined production would rise 2.4% to 14.13 million tonnes while demand grew only 1.0% to 13.86 million tonnes. Instead, the group now projects a 19,000 tonne deficit — a swing of 290,000 tonnes from the earlier forecast. (FACT: ILZSG press release, October 2025; revised data, April 2026)
The revision has three causes. First, Western smelter output has contracted, not expanded — a string of outages at facilities including Glencore's Kazzinc (Kazakhstan), Cajamarquilla (Peru), and earlier closures at Nyrstar's Hobart and Toho Zinc's Annaka have reduced ex-China refined production. Second, Chinese output has surged — up 8.4% year-on-year in the first ten months of 2025 — but this metal is largely consumed domestically and does not flow into global tradeable inventories. Third, mine supply growth has been concentrated in concentrates, not refined metal, and the mine-to-smelter bottleneck remains acute, with TC/RCs collapsing from $274/t in 2023 to $80/t in 2025 and the 2026 benchmark still unsettled. (FACT: ILZSG, SMM, Fastmarkets)
The deficit, while small in absolute terms (19,000 tonnes represents less than 0.2% of annual consumption), is critically impactful for price formation because it is concentrated in the Western market. LME-registered and off-warrant stocks recovered to approximately 144,000 tonnes by end-2025 from multi-decade lows below 50,000 tonnes in October 2025, but this is still well below normal operating levels. Any further disruption — and the Kazzinc blast on May 5 is fresh evidence that disruptions continue — will push the physical market into backwardation. (FACT: Reuters, LME, ILZSG)
The ILZSG revision from 271,000 surplus to 19,000 deficit is the statistical confirmation of what the price action has been signaling all year: the zinc market is structurally tighter than consensus believed. Do not rely on surplus forecasts from six months ago — they are outdated. The margin for error in 2026 is essentially zero. If LME stocks draw below 80,000 tonnes, expect backwardation to spike and prompt premiums to rise sharply. Secure H2 tonnage now; waiting for a surplus that no longer exists will cost more.