Zinc concentrate treatment charges have staged a sharp recovery from the $30/t floor of 2024 to the current range of $70-90/t. The move reflects the arrival of new mine supply from several projects that began ramping up in late 2025. The Gamsberg mine expansion in South Africa (Vedanta) is adding 70,000t/year of zinc-in-concentrate. In Peru, Nexa Resources' Cerro Lindo expansion contributed an additional 30,000t/yr. Boliden's Tara mine in Ireland remains fully operational after its 2024 restart.
The TC recovery is a lagging indicator. TCs typically rise 6-12 months after mine supply improves, once the concentrate flows through the supply chain. The current TC level suggests the concentrate market is well-supplied, giving smelters bargaining power after years of tightness.
Refined zinc production is responding. Global output is projected at 14.1 million tonnes in 2026, up 2.1% from 2025, according to the International Lead and Zinc Study Group (ILZSG). European smelters — including Nyrstar's Budel (315,000t/yr) and Glencore's Nordenham (165,000t/yr) — are running at 80-85% utilization, constrained by power costs rather than concentrate availability.
The refined market is still in a small deficit. ILZSG estimates a global refined zinc deficit of 80,000t in 2026, narrowing from 150,000t in 2025. The narrowing deficit reflects the TC-driven output recovery. If TCs continue rising toward $100-120/t by Q4, the market could swing to surplus in early 2027.
The key variable remains Chinese smelter production. Chinese refined output was 6.3Mt in 2025, with 2026 projected at 6.5Mt. Any disruption to Chinese hydro power supply — particularly in Yunnan — could tighten the market despite improved concentrate availability.
The TC recovery is a medium-term bearish signal for zinc prices, but it takes 6-12 months to flow through to refined output. For now, the refined market remains in deficit. Buyers should secure H2 volumes at current levels ($3,400-3,600/t). The real opportunity comes in Q1 2027 if the market swings to surplus — start negotiating lower Q1 2027 premiums now.