LME three-month zinc traded at $3,460/mt on June 27, consolidating in the $3,400–3,500 range that has defined the market since the April ILZSG meeting delivered a bombshell forecast revision. The Study Group now sees a 19,000t global refined zinc deficit in 2026, reversing its October 2025 projection of a 271,000t surplus. The pivot reflects two realities: Western smelter output is structurally lower than assumed, and Chinese refined production growth (+3% forecast for 2026) is not enough to offset Western losses.
The May 5 blast at Glencore's Kazzinc smelter in Kazakhstan — one of the largest zinc smelters outside China — crystallized the supply risk. Glencore confirmed on June 20 that the facility is running at roughly 60% of capacity and a full restart is not expected before Q4 2026. Combined with earlier closures at Toho Zinc's Annaka plant in Japan and curtailments at Nyrstar's Hobart smelter in Australia, Western refined zinc output is effectively 200,000–250,000t below 2021 levels, according to Reuters calculations based on ILZSG data.
Mine supply is recovering — ILZSG data shows global zinc mine output rose 4.8% in 2025 after three years of contraction — but the concentrate is piling up in China, where smelter treatment charges remain at historic lows near $80/t. Chinese smelters have the capacity to process this material but face margin pressure. Fastmarkets reports that Chinese zinc smelters voiced concerns about possible production cuts at end-May, citing fierce competition for concentrates and sub-breakeven TCs. This creates a paradox: ample mine supply, but smelters are struggling to convert it profitably into refined metal.
Analyst views are split on duration but aligned on near-term tightness. Goldman Sachs, Citi, and Macquarie are all described as bullish by physical market sources, with base-case forecasts of $3,200–3,600/t and upside risk to $4,000/t if LME stocks hit critical lows. Fastmarkets and StoneX take a more cautious medium-term view, expecting prices to decline later in 2026 as new mine and smelter supply — particularly from China's Kunlun smelter (560,000 t/y) — begins to outpace demand. For now, the Kazzinc disruption keeps the market in deficit and supports elevated prices.
The zinc market is tight and getting tighter on the refined side. For galvanizers and die-casters, lead times for SHG zinc in Europe are extending — some buyers report 4–6 week delays versus the normal 2 weeks. US premiums are rising as Midwest service centers hold lean inventories. If your Q3 volumes are not yet contracted, negotiate now before the July lull ends. The Kazzinc restart timeline (Q4 at the earliest) means Q3 availability is essentially fixed. Consider locking a portion of Q4 volumes at current levels — if LME stocks draw further toward 100,000t, prices could spike above $3,800/t quickly.