The global zinc concentrate market recorded a 178,000-tonne deficit in Q1 2026, according to the International Lead and Zinc Study Group. Mine output grew just 1.1% year-on-year, while smelter demand expanded 2.8%, widening the supply gap that has persisted since late 2024.
No major new zinc mines are scheduled to come online in 2026. The most significant greenfield project, Ozernoye in Russia, has ramped up slower than expected and is producing at 60% of its 600,000 t/year design capacity. Commissioning delays at processing facilities have pushed full production to 2027.
The deficit is being managed by destocking, but global concentrate inventories are now at critically low levels. Chinese port stocks of zinc concentrate fell to 280,000 tonnes in May, down 35% from January and the lowest level since 2023. Treatment charges at $65/dmt are below the breakeven point for most non-integrated smelters.
The refined zinc market, by contrast, is broadly balanced. ILZSG projects a 49,000-tonne surplus in refined zinc for 2026, as slower demand growth offsets the concentrate constraint. The disconnect between concentrate and refined markets means that TC compression is the primary signal for future refined tightness.
The concentrate deficit is a structural factor that will support zinc prices over a 6-12 month horizon. Buyers should secure H1 2027 volume commitments now, while current TC rates are still workable. If a major smelter announces a curtailment, expect a sharp rally in LME zinc toward $3,800.