Zinc futures climbed back above $3,800 per ton, rebounding from a more than six-week low reached on October 2, as ongoing supply tightness continued to pressure the market amid struggles at Western smelters. Refined zinc output in the West fell 3.4% year-on-year in the first half of 2026, weighed down by elevated energy costs and constrained raw material supply. Sentiment was further hit by Nyrstar’s strategic review of its loss-making Budel smelter in the Netherlands, which has heightened concerns about potential production cuts.
The scarcity of metal on the LME has prompted Chinese producers to increase overseas shipments. China exported 40,668 tonnes of zinc in August, the second-highest monthly volume in nearly twenty years. About 80% of those exports were directed to LME warehouses in Hong Kong, Singapore, and Taiwan, helping to alleviate some of the market tightness. Even so, the benchmark spread remains in backwardation, underscoring that near-term supply conditions are still relatively strained.
