LME three-month zinc settled at $3,460/mt on June 26, up $28 (0.82%) from the previous session. The metal is finding support near the $3,400 level, underpinned by persistent zinc concentrate tightness that has kept spot treatment charges near $50/dmt — the lowest since 2020.
The concentrate market deficit is estimated at 120,000-150,000 tonnes of zinc content for 2026, according to ILZSG data. Mine closures in Australia (MMG’s Dugald River cutbacks), Peru (Nexa’s Cerro Lindo lower grades), and Ireland (Boliden’s Tara temporary suspension) have removed roughly 280,000 tonnes of annual zinc-in-concentrate capacity.
This raw material squeeze is constraining refined output. European smelters, which rely heavily on imported concentrates, are running at 75-80% utilization. Nyrstar’s Budel smelter in the Netherlands remains on care and maintenance. Glencore’s Nordenham smelter in Germany is operating at reduced rates due to concentrate availability and power costs.
LME zinc stocks declined 0.35%, continuing a gradual drawdown trend. Available inventory has fallen below 55,000 tonnes, representing less than one week of global consumption. Cancelled warrants sit at 22% of total stock, signaling further withdrawals are likely.
On the demand side, galvanized steel production — zinc’s largest end-use — was steady in China but weakening in Europe. Asian galvanizing lines ran at 82% capacity utilization in May, while European lines averaged 71%. The divergence in regional demand is capping zinc’s ability to rally strongly above $3,500.
Zinc concentrate tightness is structural, not temporary. Buyers should anticipate sustained upward pressure on refined premiums through H2 2026. For galvanizers, negotiate zinc supply agreements with smelters directly rather than relying on spot LME purchases — the physical premium overlay is where costs are rising fastest. Watch for European smelter restarts as a potential supply-release catalyst.