A fire on May 13 forced Nexa Resources to suspend operations at its Cajamarquilla zinc smelter near Lima, the largest zinc smelter in the Americas. Combined with the May 5 Kazzinc blast, the back-to-back disruptions have removed roughly 600,000 tonnes of annual Western smelting capacity from the market, extending zinc's one-year price rally.
A fire broke out at Nexa Resources' Cajamarquilla zinc smelter in Peru on May 13, 2026, during morning operations, prompting an immediate suspension of activities at the facility. The blaze was contained the same day, and four workers were reported injured, but Nexa confirmed that operations remain temporarily suspended while the company investigates the cause, evaluates damage to smelter infrastructure, and coordinates with relevant authorities. (FACT: Nexa Resources 6-K SEC Filing, Reuters, US News, May 13, 2026)
Cajamarquilla, located near Lima, is the largest zinc smelter in Latin America and the largest in the Americas, with annual capacity of approximately 300,000 tonnes of refined zinc. Nexa has earmarked around $22 million for renovations at the site in 2026. The company has stated that based on information currently available, it does not anticipate a material impact from the incident, but it has not provided a firm restart date. (FACT: Nexa Resources, Reuters, May 13, 2026)
The suspension struck the market during an already fragile period. Just eight days earlier, on May 5, a fatal explosion at Glencore's Kazzinc smelter in Kazakhstan killed three workers and forced the 250,000-300,000 tonne-per-year complex to operate at reduced capacity. Reuters columnist Andy Home described the two events on May 20 as a "double supply hit" that triggered the latest leg of a one-year price rally. (FACT: Reuters, Andy Home, May 20, 2026)
LME three-month zinc hit a near four-year high of $3,633.50 per tonne in mid-May, up roughly 13% year-to-date. The metal has traded above $3,300/t since late January, building on the foundations of a ferocious squeeze in October 2025 that depleted LME on-warrant stocks to just 24,850 tonnes — barely enough for one day of global consumption. While LME stocks have since recovered to approximately 110,000-144,000 tonnes, they remain well below the 230,000 tonnes held at the start of 2025. (FACT: Reuters, LME, TradingEconomics, May 2026)
The ILZSG's latest assessment, published in April 2026, already showed the global refined zinc market swinging from a forecast surplus of 271,000 tonnes to a deficit of 19,000 tonnes for 2026 — before accounting for the Kazzinc and Cajamarquilla outages. Any prolonged shutdown at either facility will push the deficit deeper. (FACT: ILZSG, Kitco News, April 23, 2026)
The Cajamarquilla shutdown is the second major western smelter disruption in two weeks. With Nexa yet to announce a restart date and Kazzinc operating at reduced capacity, the combined disruption threatens to push LME cash premiums sharply higher. If you source zinc for galvanizing or die-casting in the Americas or Europe, secure Q3 volumes now and monitor LME on-warrant stocks — a drop below 80,000 tonnes is the trigger for backwardation to re-emerge. The ILZSG forecasts used by most procurement teams have been rendered obsolete by these two events.
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