LME Zinc Price Tops $4,000/t as Inventory Rebound Fails to Ease Supply Tightness

en.Wedoany.com Reported - On September 25, the London Metal Exchange (LME) cash zinc settlement price rose to $4,060/t, up 1.2% from $4,010/t on September 18; three-month zinc rose 1.0% over the same period to $3,952/t. Over the same period, LME zinc inventories increased by 6,300 t to 121,600 t, a weekly increase of 5.5%, but the cash premium over three-month futures widened from $97/t to $108/t, with supply on the cash side still tight.

Even as inventories rose, zinc concentrate supply remained affected by declining mine output. Boliden's zinc concentrate output fell 16.8% month on month to 74,200 t, while Glencore's zinc production from its own mines fell 21% year on year to 365,600 t in the first half of 2026. Major mines such as Antamina in Peru and Red Dog in Alaska, United States, were also affected by declining ore grades. Data from the International Lead and Zinc Study Group show that global zinc mine production fell 2.6% year on year in the first half of 2026.

Supply constraints also exist on the smelting side. Nyrstar's Budel zinc smelter in the Netherlands is undergoing a strategic review, with the company citing high energy costs and lower treatment charges as the main reasons. On September 16, an accident occurred at Korea Zinc's Onsan smelter in Ulsan, South Korea. Although there is no clear output reduction data yet, the incident has increased market attention to the continuity of refined zinc supply. Zinc concentrate treatment charges remain persistently low, reflecting continued high cost pressure on smelters in securing raw materials.

Global refined zinc supply and demand data show divergence between monthly and cumulative figures. In June, the global refined zinc market shifted from a surplus of 22,400 t in May to a deficit of 31,400 t; however, the cumulative surplus for the first half of 2026 remained at 120,000 t, higher than 74,000 t in the same period of 2025. China's refined zinc output in August fell 1.8% year on year to 639,000 t, the first year-on-year decline in nearly a year.

Higher Chinese exports have supplemented some deliverable resources for the London market. LME inventories previously rebounded from a low of 86,500 t on August 17 to more than 110,000 t in early September, but the newly added inventories have not fully converted into metal available for immediate delivery, with some inventories already cancelled and awaiting withdrawal. In early September, the LME zinc cash premium over three-month futures once exceeded $160/t and then narrowed somewhat, but as of September 25 it still remained at a three-digit premium.

The Indian market also remained elevated. Hindustan Zinc raised its benchmark price for special high-grade zinc ingots by 900 Indian rupees/t to 425,500 Indian rupees/t on September 24; BigMint's assessment of special high-grade zinc ingots ex-works Delhi reached 447,700 Indian rupees/t on September 25.