The divergence between zinc mine output and refined production represents one of the most significant dislocations in the base metals complex. New mines in Brazil (Aripuana), the DRC (Kipushi), and Russia (Ozernoye) have boosted concentrate availability significantly, with ILZSG reporting 4.6% global mine output growth in 2025 and further gains forecast for 2026.
However, smelters cannot keep pace. Environmental regulations, aging infrastructure, and thin margins from compressed treatment charges are limiting refined output. Chinese smelters, which process a significant share of global concentrate, face additional pressure from energy intensity targets and carbon reduction mandates.
The ILZSG projects global zinc mine output reaching approximately 12.4-12.5 million tonnes in 2025, with further gains in 2026 driven by Brazil, Canada, Norway, and China. Yet refined zinc production is expected to grow at only a fraction of that rate, meaning the concentrate surplus will persist alongside refined tightness.
This dynamic has interesting implications for price discovery. Concentrate oversupply should theoretically push TC/RCs higher and lower metal prices, but the smelter bottleneck creates an effective floor under refined prices by limiting how much concentrate can actually be converted into metal.
For 2026, the market balance depends on whether new smelter capacity — particularly in China and India — can come online to process growing concentrate supply. Without meaningful smelter expansion, the refined market will remain tight regardless of how much ore is mined.
The smelter bottleneck means zinc buyers should not assume that strong mine output will translate into lower refined prices. The disconnect between concentrate and metal markets may persist through 2027. Focus on refined metal availability rather than headline mine supply data when assessing market balance.