The zinc price outlook for H2 2026 and beyond is characterized by wide dispersion among forecasters, reflecting the unusual disconnect between headline surplus projections and real-time inventory indicators. Analysts at Goldman Sachs, Citi, and Macquarie maintain bullish forecasts in the $3,200-$3,600 per tonne range, with an upside scenario of $4,000 per tonne if LME stocks continue to fall. The bullish case rests on the observation that the available zinc in LME warehouses is at its lowest level relative to global consumption since 1989, creating asymmetric price risk to the upside.
The World Bank projects a more moderate 4.6% annual increase to an average of $3,000 per tonne in 2026, before prices decline to $2,750 per tonne in 2027 as new mine supply reaches the market. The increase expected in 2026 is attributable to the strong price rise recorded at the beginning of the year, still supported by supply constraints and higher energy costs from the Persian Gulf conflict. Morgan Stanley has revised its 2026 zinc price outlook to $2,900 per tonne on average, citing the potential for Chinese stock releases and smelter overhang to cap gains.
Energy costs represent a significant wildcard for the zinc market. The Persian Gulf conflict has raised natural gas and electricity costs for European smelters, which account for approximately 15% of global refined zinc production. An escalation of energy price pressure could force further smelter cuts, tightening supply at a time when LME stocks are already at critical lows. Conversely, a resolution of the conflict would reduce the cost floor and potentially allow prices to retreat toward $3,000/t.
The asymmetric risk profile favors hedging for upside protection. With LME stocks at critical lows and energy costs elevated, the probability of a $4,000 spike is higher than market pricing suggests. Secure price caps or collars for H2 2026 volumes. Monitor LME stock data weekly.