 |
| Zinc Prices |
US Zinc Market Surges to Four-Year High Amid Severe Inventory Deficits
Zinc prices climb to their highest level since June 2022 on the London Metal Exchange (LME). Warehouse stockpiles drain rapidly, and mine supply cuts tighten the physical market. Therefore, LME zinc for cash settlement closes at $4,107 a tonne on August 27, marking a 55% increase from mid-2025.
LME warehouse stock drops from roughly 264,000 tonnes in December 2024 to 95,000 tonnes. This 64% drawdown leaves available metal at its lowest level since April 2023. Consequently, the cash settlement price rises while warehouse stock declines because buyers lack sufficient metal to draw on. This tightness concentrates primarily in Western warehouses while Shanghai Futures Exchange inventories rise.
HSBC forecasts a 2.1% year-on-year decline in 2026 production, and JP Morgan expects prices to remain elevated. Major zinc producers capture strong market gains, with Teck Resources, Glencore, and Nexa Resources reporting significant share price increases since January 2026.
ScrapInsight Commentary
The dramatic drawdown in LME zinc inventories underscores severe structural deficits driven by Latin American production cuts. As Western warehouse supplies dwindle, prices will likely stay elevated through 2026, forcing consumers to seek alternative regional sourcing and accelerating secondary recycling initiatives.
