Refined Zinc Deficit Forecast Signals Tight Balance Despite Mine Supply Growth

ILZSG

Refined zinc deficit conditions are expected in 2026 as global demand slightly outpaces refined metal supply, according to the International Lead and Zinc Study Group. The group forecasts a refined zinc deficit of 19,000t this year.

The refined zinc deficit reflects a market where demand growth remains modest but supply growth is also limited. Global refined zinc demand is expected to rise by 1.3% to 14mn t, while refined zinc output is forecast to increase by 1.4% to 13.99mn t.

The refined zinc deficit is not large, but it highlights a fragile balance in a metal tied closely to galvanised steel, infrastructure, automotive production, construction and industrial manufacturing. Even small shifts in mine output, smelter operations or steel demand could move the market back into surplus or deeper deficit.

China, Europe and India Support Zinc Demand

China remains the world’s largest zinc consumer and will continue to anchor demand growth. ILZSG expects Chinese refined zinc demand to rise by 1.8% in 2026, following 1.9% growth in 2025.

European demand is forecast to rise by 1.1% this year, slowing from 3.5% growth last year. US demand growth is also expected to moderate to 1.4%, after expanding by 7% in 2025.

India and South Korea are expected to post higher refined zinc demand. Their growth reflects continued industrial activity, infrastructure needs and manufacturing consumption.

The Middle East outlook is weaker. Iran’s zinc usage is expected to decline sharply because of major infrastructure damage, especially in the steel sector, caused by the war. Demand in Saudi Arabia and the UAE is also expected to fall because of refined metal import disruption and economic instability.

This regional split matters for zinc producers and traders. Growth in Asia may support consumption, but slower demand in Europe and the US, combined with disruption in the Middle East, limits the strength of the global demand recovery.

Mine Supply Rises Slowly as Smelters Face Concentrate and Energy Constraints

Global zinc mine production is forecast to rise by only 0.3% to 12.55mn t in 2026. This follows a stronger 2025, when mine production rose by 4.8%, or 5.9% excluding China.

This year’s mine growth will be supported by higher output in the Democratic Republic of Congo, Portugal and China. New capacity in China, including the Huoshaoyun mine, is expected to contribute to supply.

However, declines in Peru, Sweden and the US will partly offset these gains. Lower output is expected at Antamina, Garpenberg and Red Dog, three important zinc-producing operations.

Refined zinc output is expected to rise by 1.4% to 13.99mn t. Chinese refined production is forecast to grow by 3% as new capacity starts up, following a 6.7% increase last year.

European refined output is also expected to rise, supported by Boliden’s Odda smelter expansion in Norway and the planned restart of Russia’s Verkhny Ufaley smelter. However, higher energy costs and limited concentrate availability continue to pressure several European producers.

Outside Europe and China, refined zinc production is expected to increase in South Korea but decline in Iran and Canada. This shows that refined zinc supply remains exposed to regional energy costs, concentrate access and operational disruption.

The lead market presents a different picture. ILZSG expects refined lead supply to exceed demand by 109,000t in 2026, with output rising by 1.3% to 13.83mn t and demand increasing by 1.1% to 13.72mn t.

The Metalnomist Commentary

The refined zinc deficit forecast points to a market that is balanced on a narrow edge, not structurally short. Zinc’s outlook will depend on whether Chinese smelter growth and new mine capacity can offset weaker regional demand and concentrate constraints.