Zinc prices hit their highest level since June 2022 on the London Metal Exchange, driven by accelerating warehouse drawdowns and tightening physical mine supplies.
London Exchange Inventories Plummet
LME zinc for cash settlement closed at $4,107 per metric ton, marking a sharp 55 percent recovery from mid-2025 lows. Total exchange warehouse stocks dropped by 64 percent from roughly 264,000 tons down to 95,000 tons. This severe inventory depletion reflects acute physical tightness across Western regional warehouses, while Asian exchanges experienced contrasting inventory inflows.
Supply Constraints and Analyst Forecasts
Global mining output continues to face headwinds, with HSBC projecting a 2.1 percent year-on-year decline in production to 12.5 million tons due to lower output across Latin American operations. Major financial institutions anticipate that persistent market deficits will keep prices elevated throughout the year. Consequently, major zinc producers including Teck Resources, Glencore, and Nexa Resources have seen substantial equity gains since the beginning of 2026.
Market Impact
○ Impacted Metals: Special Grade Zinc, SHG Zinc, Zinc Alloy
○ Direction: Bullish
○ Time Horizon: 2026–2027
○ Affected Industries: Galvanizing, Die-Casting, Automotive, Construction, Battery Manufacturing
○ Related Price Reports: Zinc Weekly Price Report
○ Watch Item: Monitor weekly LME warehouse inventory movements and Latin American mine output reports for signs of physical supply replenishment.
SuperMetalPrice Commentary:
The sharp inventory drain on the LME underscores structural vulnerabilities in primary zinc supply chains. As mine production lags behind steady industrial consumption, buyers face heightened near-term volatility and rising procurement costs.
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