LME zinc for three-month delivery settled at $3,437 per metric ton on June 25, down 1.9% from the prior session. The metal has now fallen for four consecutive sessions, dropping 4.3% this week in a move that tracks the broader base metals selloff rather than any zinc-specific catalyst.
LME zinc inventories have stabilized near 155,000 tonnes after declining steadily through April and May. The inventory drawdown -- which saw stocks fall from roughly 230,000 tonnes at the start of 2026 -- had been the primary bullish driver for zinc. With the drawdown pace slowing in June, some of that upward pressure has eased.
The zinc market remains in a concentrate supply deficit. Treatment charges (TCs) for spot zinc concentrate have fallen to multi-year lows below $50 per dry metric tonne, reflecting intense competition among smelters for limited mine supply. This should, in theory, support zinc prices. But the macro selloff is overwhelming the micro fundamentals for now.
On the demand side, galvanized steel production -- which accounts for roughly 60% of zinc consumption -- has been stable. Global steel output was roughly flat year-over-year through May 2026, providing steady but unspectacular zinc offtake. The absence of a demand surge, combined with stabilizing inventories and macro headwinds, is capping zinc's upside.
The zinc market is in a strange place — the concentrate market is tight, TCs are at multi-year lows, but LME prices are falling because of macro sentiment. This disconnect can’t last indefinitely. If you have Q3 zinc needs, the current dip to $3,437 is a reasonable entry point. The concentrate tightness will eventually force smelter curtailments that tighten the refined market.