The Teck Resources-Korea Zinc benchmark, which sets the tone for the global zinc concentrate market, has been in freefall. For 2023 shipments: $274/t. For 2024: $165/t — a 40% drop. For 2025: $80/t — another 51% cut, representing a 71% cumulative collapse from 2023 levels. (FACT: Reuters, Fastmarkets, SMM — 2023-2025 annual benchmarks)
The driver is a persistent concentrate shortage that has defied expectations of relief. Global mine supply grew in 2025 — SMM estimated an increase of more than 600,000 tonnes of zinc-in-concentrate, with about 550,000 tonnes of that growth coming from outside China. But this increase has been absorbed by Chinese smelter capacity expansion, which added 430,000 tonnes of new refining capacity in 2025 alone. The result: concentrate that was supposed to flow to Western smelters went to China instead, and Western smelters are now competing for a shrinking pool of ex-China concentrates. (FACT: SMM, Antaike, Reuters)
The 2026 benchmark remains unsettled as of late May 2026. Fastmarkets reported at LME Week 2025 that the outlook for the 2026 TC was "the biggest question mark" for the zinc market. Industry expectations range from -$10/t to low positive single digits. Spot TCs in China have already fallen to approximately 1,600 RMB per metal-tonne, and imported concentrate TCs to approximately $40 per dry tonne. (FACT: Fastmarkets, SMM, SunSirs — January 2026)
Negative TCs — where smelters pay miners to take concentrate — have occurred in the copper market (spot TC/RCs hit -$90/t in early 2026), but they have never been a serious benchmark consideration for zinc. If the 2026 annual benchmark settles near zero or negative, it would signal that the concentrate shortage has entered a new phase, one that forces marginal smelter capacity in the West to shut permanently.
LME zinc inventories, meanwhile, reflect the same tension. After collapsing to under 50,000 tonnes in October 2025 — barely one day of global consumption — stocks recovered to approximately 96,000-110,000 tonnes by early May 2026. But this is still well below the 230,000 tonnes at the start of 2025. The recovery is fragile, and as the Kazzinc explosion on May 5 demonstrated, any new disruption will draw stocks lower again. (FACT: LME, SMM, Reuters)
Low TCs mean Western smelters are losing money on every tonne they process. This is a structural risk to supply: if TCs stay at or near zero, expect more Western smelter closures or maintenance extensions. For zinc buyers, this translates into higher LME prices and wider physical premiums. The TC collapse is not a smelter problem — it is your supply chain problem. If the 2026 benchmark settles below $50/t, accelerate H2 contracting; the smelter margin crisis will eventually reduce refined output. The only hedge is to diversify supply sources and build inventory buffers.