The ILZSG delivered one of the most dramatic forecast revisions in recent commodity history, shifting its 2026 global zinc outlook from a 271,000-tonne surplus to a 19,000-tonne deficit after accidents at two major smelters. A fire at Nexa Resources' Cajamarquilla plant in Peru and an incident in Kazakhstan removed approximately 600,000 tonnes of annual capacity.
The revision caps a year of surprises. In October 2025, an LME squeeze pushed prices to three-year highs as LME stocks fell to just 35,000 tonnes - barely one day of consumption. Stocks have rebuilt to 96,000 tonnes but remain well below early-2025 levels. JP Morgan expects LME zinc to average $3,400-3,500/t for the remainder of 2026.
A sharp regional divide persists: China's refined output rose 8.4% in 2025, creating a surplus within China, but the Western market remains tight with smelter output outside China falling 2.2%. ILZSG expects Chinese output growth of 3.0% in 2026 but global growth of only 1.4%, meaning Western smelter problems will persist. Treatment charges remain low at $80/t.