Zinc prices remain well-supported above $3,500/mt as the concentrate market tightness that has persisted since early 2025 shows no signs of easing. Spot treatment charges at $20-30/t are far below the typical smelter breakeven, forcing some Chinese smelters to reduce operating rates.
SHFE zinc rose 0.74% to 24,450 CNY/mt, outperforming other base metals on the day. The relative strength reflects tighter domestic concentrate availability and stronger downstream demand from galvanizers.
LME registered zinc inventory held at 152,000 tonnes, with 65% classified as canceled warrants. The high cancellation ratio signals that material is being drawn for physical delivery, keeping available inventory thin.
The concentrate deficit is driven by declining ore grades at major mines and the slow ramp-up of new projects. The Gamsberg expansion in South Africa has been delayed by equipment delivery issues, and the Dugald River mine in Australia is processing lower-grade ore.
The concentrate market will keep refined zinc prices elevated through Q3. Hedge Q4 requirements now at current levels; $3,500-3,700 is the likely range. Monitor LME stock cancellations — if available inventory drops below 50,000 tonnes, expect a price spike toward $3,800.