Global refined zinc market surplus set to widen through 2026

Zinc

The global refined zinc market surplus is forecast to widen sharply as supply growth outpaces a modest demand recovery. According to ILZSG projections, refined zinc will move from an 85,000t surplus in 2025 to a 271,000t surplus in 2026. As a result, the global refined zinc market surplus will increasingly shape treatment charges, pricing power and smelter utilisation, especially outside China. The refined zinc balance already showed a 47,000t surplus in the first half of this year, confirming the shift from earlier tightness.

However, demand for refined zinc is still expected to grow, even under pressure from weak construction and patchy industrial activity. ILZSG forecasts refined zinc use to rise by 1.1pc to 13.71mn t in 2025, led by a 1.3pc increase in China on stronger vehicle output. Meanwhile, European demand should finally stabilise, rising by 0.7pc after three years of contraction, with France, Germany, Norway and Poland offsetting declines in Italy and Russia. Emerging markets including India, Saudi Arabia, Thailand and Vietnam will also support consumption, even as Brazil and South Korea lag.

Supply expansion drives global refined zinc market surplus

The global refined zinc market surplus is driven primarily by a clear upturn in mine and smelter supply. ILZSG expects zinc mine production to rise by 4.6pc to 12.51mn t in 2025, with 5pc growth outside China. Therefore, higher output from Bosnia and Herzegovina, Ireland, Portugal, Russia and Sweden joins gains in China, South Africa, Peru and the DRC. Further mine growth in 2026 will be underpinned by the reopening of Aljustrel in Portugal and higher production in Australia, Brazil, the DRC and China.

At the smelter level, refined zinc output is forecast to rise by 2.7pc to 13.8mn t in 2025, then by 2.4pc to 14.13mn t in 2026. The biggest driver is China, where new capacity is being commissioned and is expected to lift output by 6.2pc in 2025. Meanwhile, European production receives a structural boost from Boliden’s 150,000 t/yr expansion at the Odda smelter in Norway. These increases will outweigh declines in Italy, Japan, Brazil, Canada, Mexico and South Korea, locking in the global refined zinc market surplus unless demand surprises to the upside.

Refined lead market also tips into surplus

The surplus story extends beyond zinc, with refined lead also moving into a looser balance. ILZSG projects refined lead supply to exceed demand by 91,000t in 2025 and 102,000t in 2026. Demand for refined lead is still expected to rise by 1.8pc this year to 13.25mn t, and by 0.9pc to 13.37mn t in 2026, driven mainly by Europe, Vietnam and the US. However, supply will grow faster, with refined lead output seen rising by 2pc to 13.34mn t in 2025 and by 1pc to 13.47mn t in 2026, supported particularly by Brazil and India. As a result, both zinc and lead markets are heading into a multi-year period of oversupply.

The Metalnomist Commentary

The global refined zinc market surplus projected for 2025–26 signals a prolonged phase of buyer’s market dynamics in galvanising and alloy segments. Smelters with high energy costs or weaker integration into mine supply will face the greatest margin pressure as treatment terms and premiums adjust. For lead, surpluses underline the importance of battery recycling economics and regional policy support, especially as EV and energy storage value chains reshape traditional lead-acid demand.

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.

Global Refined Zinc Market Slips into Deficit in 2024, Reports ILZSG

ILZSG

Declining Supply Triggers Market Deficit Despite Steady Demand

The global refined zinc market fell into a deficit of 62,000 tonnes in 2024, as supply dropped while demand remained stable, according to the International Lead and Zinc Study Group (ILZSG). This marks a significant change from the previous year, when the zinc market recorded a surplus of 310,000 tonnes.

Zinc Mine Output Drops Across Key Regions

Global mined zinc output declined by 2.8% year-on-year to 11.89 million tonnes. Major contributing factors included a sharp 31.5% drop in Canada, a 1.5% decrease in China, and a 13.5% fall in Peru due to lower production at the Antamina mine. European zinc mining also slipped by 9.7%, mainly from Ireland and Poland. However, higher output in Bolivia, Mexico, and the Democratic Republic of Congo—where Ivanhoe Mines launched the Kipushi mine in June—helped offset these declines.

Refined Zinc Production and Use Trends

Refined zinc production dropped 2.6% in 2024, reaching 13.55 million tonnes. The fall was primarily due to limited concentrate availability and production cuts in China, Japan, South Korea, and Canada. Some recovery was seen as France, India, and Germany increased their output, especially with the Nordenham smelter resuming operations in March. Meanwhile, global refined zinc consumption edged up by 0.1%, driven by higher demand in Brazil, India, South Korea, Mexico, Turkey, and Vietnam. Consumption declined in China, Europe, and the US. Notably, China’s imports of zinc in concentrate form also fell by 13.1% to 1.96 million tonnes. In December alone, refined zinc use outpaced production, creating a monthly deficit of 41,100 tonnes.

Global Refined Zinc Market Set for Surplus in 2025: ILZSG

Zinc

Zinc and Lead Supply to Outpace Demand Amid Economic Challenges

The global refined zinc market will shift into surplus in 2025, according to the International Lead and Zinc Study Group (ILZSG). The organization projects a surplus of 93,000t next year, marking a notable shift in market dynamics.

Global demand for refined zinc is forecast to grow by 1% year-on-year, reaching 13.64 million tonnes in 2025. China, the largest consumer, will see a modest 0.9% increase in usage after a 1.9% decline last year. Demand is also expected to rise in Brazil, India, and Turkey, although South Korea's consumption will fall. Nevertheless, global economic uncertainty, particularly related to US trade policies, could weigh on overall demand growth.

Zinc and Lead Supply to Expand Significantly

On the supply side, global zinc mine production is forecast to rise by 4.3% to 12.43 million tonnes in 2025. Output gains are expected in Australia, China, Mexico, the Democratic Republic of Congo, and Peru. European mine production will also rebound by 18.3%, driven by recoveries in Bosnia and Herzegovina and the restart of Ireland’s Tara mine.

Global refined zinc metal output is set to increase by 1.8%, reaching 13.73 million tonnes. Higher concentrate availability will support this growth, particularly from China and Norway, where Boliden has expanded its Odda smelter capacity by 150,000 t/yr. However, closures at Glencore’s Portovesme smelter in Italy and Toho Zinc’s Anakka facility in Japan will partially offset these gains.

Meanwhile, ILZSG projects that refined lead supply will exceed demand by 82,000t in 2025. Refined lead demand is set to grow by 1.5% to 13.19 million tonnes, while supply will expand by 1.9% to 13.27 million tonnes, mainly driven by production increases in China, India, Mexico, and the United States.

The zinc and lead markets are poised for critical adjustments as new supply streams emerge against a backdrop of geopolitical and economic headwinds.

Refined Zinc Market Surplus Forecast for 2025 Amid Rising Supply

ILZSG

The global refined zinc market surplus is projected to reach 93,000 tonnes in 2025, according to the International Lead and Zinc Study Group (ILZSG). This forecast comes as supply growth outpaces a modest recovery in global demand, particularly in China, the world's largest zinc consumer.

Refined Zinc Demand Rebounds Slightly

Global demand for refined zinc is expected to rise by 1% to 13.64 million tonnes in 2025. China is projected to see a 0.9% increase, following a 1.9% decline in 2024. Other key markets such as Brazil, India, and Turkey are also forecast to grow, while South Korea will likely see a decline. However, ongoing global economic uncertainty, especially surrounding U.S. trade policy, could weigh on zinc consumption.

Zinc Supply Rises on Mine and Smelter Recovery

Meanwhile, global mine production is forecast to increase by 4.3% to 12.43 million tonnes in 2025. Output will rise in Australia, China, Mexico, the Democratic Republic of Congo, and Peru. Europe is also expected to rebound, with an 18.3% production increase led by Bosnia and Herzegovina, Russia’s Ozernoye mine, and Ireland’s Tara mine. On the refined metal side, global output is projected to climb 1.8% to 13.73 million tonnes. This growth is supported by China and Norway, where Boliden expanded capacity at its Odda smelter by 150,000 tonnes annually.

However, recent closures at Glencore’s Portovesme smelter in Italy and Toho Zinc’s Anakka operation in Japan will partly offset these gains.

Refined Lead Market Also Shifts into Surplus

In addition to zinc, the ILZSG forecasts a surplus in the global lead market. Refined lead supply is expected to exceed demand by 82,000 tonnes in 2025. Demand is projected to rise by 1.5% to 13.19 million tonnes, while output will grow by 1.9% to 13.27 million tonnes, mainly from China, India, Mexico, and the United States.

The Metalnomist Commentary

The anticipated refined zinc market surplus reflects an ongoing shift in global base metal dynamics. Despite moderate demand recovery, rising output from mines and smelters—particularly in Asia and Europe—could place downward pressure on prices unless macroeconomic conditions improve significantly.

Global Zinc Market Records 19,000t Surplus in January-October

ILZSG(The International Lead and Zinc Study Group)

The global Zinc market registered a 19,000-tonne surplus in the first ten months of 2024, according to the latest data from the International Lead and Zinc Study Group (ILZSG). This surplus emerged despite a significant drop in global mined zinc output, which fell 3.8% year-on-year to 9.67 million tonnes (mn/t) due to lower production in Canada, China, South Africa, and Peru. Peru’s Antamina mine, a key zinc producer, saw a substantial decline in output, further contributing to the decrease.

Refined Zinc Production Declines While Demand Rises

Global refined zinc production reached 11.36mn t, down 1.7% year-on-year. The decline was driven by lower output from China, Japan, the Netherlands, Peru, and Russia, though France, India, and Germany partially offset these losses with production increases.

Despite these supply constraints, global zinc consumption rose by 1.25% to 11.34mn t, reflecting stronger demand from Brazil, India, South Korea, Mexico, Taiwan, Thailand, Turkey, and Vietnam. The rising consumption, particularly from galvanizing industries, suggests a stable outlook for zinc demand.

China’s Zinc Concentrate Imports Drop Sharply

China’s zinc concentrate imports fell by 19.6% to 1.52mn t, reflecting lower domestic smelting activity and a weaker appetite for imported zinc ores. Given China’s role as the world’s largest zinc consumer and producer, fluctuations in its import levels can have significant impacts on global supply chains.

Zinc Demand and Supply Expected to Rebalance in 2025

Zinc

Recovery in Automotive, Infrastructure, and Green Energy to Boost Zinc Market

Global zinc demand is projected to rise marginally in 2025, driven by steady growth from automotive, infrastructure, and green energy sectors. According to the International Zinc Association (IZA), refined zinc demand is forecast to increase by 1%, with notable growth in India and the United States, while China and Europe show moderate gains.

Meanwhile, the zinc supply landscape is recovering after a contraction in 2024. ILZSG projects global mine supply will increase by 4.3% this year, supported by new output from the Kipushi, Tara, and Buenavista mines. However, some production sites, including Russia’s Ozernoye and the Red Dog mine in the U.S., may fall short of expectations, highlighting persistent uncertainty in the zinc supply chain.

Smelter expansions are also contributing to a long-term supply rebound. Boliden’s Odda 4.0 project in Norway is on track to reach 350,000 t/yr capacity in the second half of 2025. Additional capacity from the Nordenham smelter in Germany and new Chinese smelters will be partially offset by weaker output from facilities in Canada, Italy, Australia, Japan, and South Korea. As a result, the ILZSG forecasts a global surplus of 93,000 tonnes in 2025, reversing last year’s deficit of 62,000 tonnes.

Automotive and Green Tech to Sustain Long-Term Zinc Growth

The automotive industry remains a key driver of zinc consumption, particularly in galvanised steel for vehicle bodies. Western markets already have high galvanisation rates, while China and India are rapidly catching up. The IZA forecasts a 22% increase in auto-sector zinc use by 2030, translating to an additional 140,000 tonnes of demand.

India’s rapid urban development and China’s robust manufacturing output are also boosting zinc demand across infrastructure and consumer goods. In Europe, public investment in infrastructure and defence, especially in Germany, is expected to support a moderate recovery in zinc usage from late 2025 onward.

Green energy technologies — including wind, solar, and battery systems — are also emerging as major zinc consumers. The IZA projects demand from green tech will exceed 652,000 tonnes by 2030, with more than $1 billion already invested in zinc-based energy storage systems.

The Metalnomist Commentary

Zinc's supply-demand fundamentals are gradually stabilizing, with rising industrial and green-tech consumption offsetting geopolitical and logistical risks. The rebound in mine and smelter capacity suggests a structurally balanced market may return by 2025. However, long-term resilience will depend on investment in both primary production and recycling infrastructure.

Zinc Prices Set to Drop in 2025 Due to Increased Supply and Weak Demand

McArthur River Mining

Zinc prices are expected to decline in 2025, as global supply improves and demand remains subdued in key consumption sectors, particularly in the construction and automotive industries. This shift comes after a strong price performance in 2024, driven by tight supply conditions and mining disruptions.

Price Performance in 2024

Zinc has been one of the standout performers on the London Metal Exchange (LME) in 2024, with prices hovering above $3,000 per ton in December, compared to $2,537 per ton in January. This 6% increase from the previous year can be largely attributed to supply disruptions at key mines. Notable interruptions included Glencore's McArthur River mine in Australia, which halted operations in March due to extreme rainfall, and MMG’s Dugald River mine in China, which was placed on care and maintenance during Q3.

The zinc market faced a 164,000-ton deficit in 2024, primarily due to reduced production from mines like Boliden's Tara mine in Ireland and Almina's Aljustrel mine in Portugal. However, supply conditions are expected to shift in 2025, leading to a bearish outlook for zinc prices.

Improved Supply Forecast for 2025

The International Lead and Zinc Study Group (ILZSG) forecasts a surplus of 148,000 tons in 2025 as new mines and production ramps up globally. One major development contributing to this surplus is the reopening of Ivanhoe Mines' Kipushi mine in the Democratic Republic of Congo, which is expected to produce 278,000 tons per year over its first five years. Kipushi will become Africa's largest zinc mine and the fourth-largest globally.

In addition, European production is expected to rise, with increased output from Bosnia and Herzegovina, Portugal, and the reopening of Tara operations in Ireland. Russia's zinc production is also set to grow, supported by the newly opened Ozerneoye plant. Other key regions, including Australia, Canada, China, Japan, the Netherlands, and Norway, are expected to see increased concentrate supply, especially in the first quarter of 2025. According to trading firm Macquarie, global mined supply is projected to grow by 5.8% in 2025, with around 570,000 tons of zinc in new project approvals.

Weak Demand Pressures Zinc Prices

While supply is set to increase, demand growth for zinc is expected to remain weak, especially in the construction and automotive sectors, which together account for a significant portion of global zinc consumption. Carbon steel demand has fallen in 2024, driven by weakness in the construction sector, particularly in China. European manufacturing also remains sluggish, with the automobile sector facing significant challenges. Volkswagen, for instance, has announced plans to close several plants and lay off thousands of employees in response to falling sales and weak demand for cars.

Macquarie predicts a modest 1.7% growth in global refined zinc demand in 2025, a revision down from the previously anticipated 2.5% growth rate. The uncertainty surrounding potential new U.S. tariffs under President-elect Donald Trump's administration adds another layer of risk, particularly regarding the strength of the U.S. dollar and global trade dynamics.

Zinc Price Outlook for 2025

Given the expected supply surplus and the persistent demand lag, analysts are generally bearish on zinc prices for 2025. The World Bank and Fitch Ratings expect zinc prices to average $2,600 per ton in 2025, with further declines to $2,500 per ton by 2026. Macquarie is similarly forecasting a drop to $2,650 per ton in 2025, followed by a decline to $2,450 per ton in 2026. These price drops reflect the anticipated market surplus and continued weak demand.

Conclusion

As zinc supply increases and demand struggles to pick up, the market is expected to experience price declines in 2025. The key factors driving this change include the reopening of major mines, such as Kipushi, and continued challenges in major zinc-consuming sectors like construction and automotive manufacturing. While supply-side factors are positive, weak demand and potential trade uncertainties are expected to put downward pressure on zinc prices in the years to come.