Supply Surprise: Zinc’s 2026 Deficit and What it Takes to Close the Gap
Zinc caught the 2026 metals market by surprise.
In late 2025, the forecast was that refined zinc supply would outpace demand in 2026, estimating a 271,000 metric ton (MT) surplus. Eyes turned to countries like Peru for more zinc production, and prices were estimated to go down. However, the 2026 zinc scenario went in a different direction. The surplus never showed, and prices soared.
The International Lead and Zinc Study Group later announced a 19,000 MT deficit in the middle of the year, leaving the sector wondering where things went wrong. This also led to a renewed interest in past-producing zinc districts in the hopes of seeing recovery and prosperous years ahead for the metal. Projects such as Apex Resources’ (TSXV:APX,OTCQB:SLMLF) Jersey-Emerald in Southern BC now hold the market’s gaze as many resort to finding potential sources of new supply.
Expectations versus reality
The 2026 zinc forecast was based on numbers, with global production seeing a significant recovery through 2025 to early 2026. More often than not, higher production results in the market loosening.
But while metal production and supply are related, they do not always move in direct proportion. They are also not the sole elements in the equation, as mine concentrate needs to undergo processing or smelting.
In May 2026, two zinc operations experienced major accidents.
Mining giant Glencore’s (LSE:GLEN,OTCPL:GLCNF) Kazzinc smelter in Kazakhstan saw an explosion, while Nexa Resources’ (NYSE:NEXA) Cajamarquilla plant in Peru was temporarily suspended following a fire incident. These events led to a total loss of roughly 600,000 MT of annual smelting capacity.
Aging large mines also played a role in the surprise deficit. Glencore reported a production drop from 213,600 MT in the first quarter of 2025 to 176,900 MT in the first quarter of 2026, a decrease it attributed to the closure of its Lady Loretta mine in Australia in late 2025. Teck Resources (TSX:TECK.A,TECK.B,NYSE:TECK) recorded a production decrease of 117,000 MT to 106,000 MT in the same period. The company revealed that lower grades have been showing at its Red Dog mine in Alaska, a project that is expected to run until 2031.
On a global scale, zinc concentrate flows were affected by the Middle East conflict.
Reports found that disrupted Gulf shipping raised concerns for Iranian zinc concentrate flows to China, which made up over 5 percent of China’s total concentrate imports in 2025.
“The disruption is modest in global terms, but its speed underlines the fragility of concentrated trade routes. Smelters are watching the situation closely as the supply gap widens,” said Jonathan Leng, principal analyst of zinc markets at Wood Mackenzie, adding how the Glencore and Nexa accidents introduce another layer of complication.
Combined, these events and facts demonstrate the value of proximity and control over one’s supply chain, a competitive advantage in…
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