Zinc treatment charges — the fees smelters charge miners to process concentrate into refined metal — are rebounding from historic lows, signaling a fundamental shift in the raw material supply picture. After falling to an annual record low of approximately $80/t in China in 2025, benchmark RCTCs are now expected to rise toward $160/t in 2026 as ore availability improves significantly.
The recovery is driven by a sharp increase in Chinese ore supply. Zinc ore availability in China jumped 45% in the January-July period compared to a 22% decline in the same period the previous year. This improvement, combined with the ramp-up of Kunlun smelter's 560,000 t/y capacity, has transformed China from a concentrate importer to a market approaching self-sufficiency.
Global mine supply is also turning the corner. After three consecutive years of decline, global zinc mine production is rebounding in 2025-26. Refined zinc output is forecast to rise 2.4% in 2026 to approximately 14.13 million tonnes, driven by better concentrate availability in Brazil, Canada, Norway, and China.
New greenfield capacity is entering the pipeline. The Tala Hamza project in Algeria is scheduled to begin production in 2026, and a new zinc circuit at Asmara in Eritrea is expected late 2026-2027. These additions are expected to support further appreciation in spot treatment charges and were a consensus view during LME Week discussions.
However, the recovery in treatment charges is not uniform. Spot TC negotiations for 2026 annual contracts have been described as the most complex in years, with significant divergence between Chinese and ex-China terms. The regional disparity reflects the broader two-speed market: surplus in China, tightness elsewhere.
The recovery in treatment charges is a bullish signal for refined zinc availability in H2 2026, suggesting the concentrate squeeze is easing. However, the benefits are geographically uneven. Chinese-origin concentrate and refined metal will become more available, potentially creating price divergence between SHFE and LME. Procurement teams should explore Chinese-origin supply for Asian delivery and monitor TC negotiations for signals on H2 refined output. If TCs continue rising, smelter production should increase, potentially easing refined metal premiums.