Zinc Price Forecast: What's Next After 2025's Rollercoaster?

The zinc price ended 2025 near where it started, but the journey was anything but smooth. Starting at US$2,927 per metric ton (MT) on January 2, it crashed to US$2,562 by April 9—a brutal 14 percent drop—before climbing back to US$3,088 by year-end. For investors watching the base metals space, the real question isn’t where zinc has been, but where it’s heading in 2026.

Why zinc’s 2025 was a tale of two halves

The first half of 2025 was turbulent. When President Donald Trump announced “Liberation Day” tariffs in early April, traders panicked about a potential recession that could hammer demand for galvanized steel—the lifeblood of zinc consumption. Real estate and manufacturing, two sectors critical to zinc demand, faced headwinds from persistent high inflation and elevated interest rates.

But the narrative shifted as tariff threats eased. Still, the damage to sentiment lingered. The US housing market remained stalled despite affordability crises, while China’s property sector—already reeling from the 2020 Evergrande collapse—showed no signs of recovery. According to reports, November sales from China’s top 100 developers fell 36 percent compared to 2024.

By mid-year, however, zinc found its footing. Q3 and Q4 saw steady gains as investors recalibrated their outlook, pushing prices higher through the fall.

The uncomfortable surplus problem

Here’s the catch: despite zinc’s price recovery, the market faces a fundamental imbalance. The International Lead and Zinc Study Group (ILZSG) predicted an 85,000 MT surplus for 2025, with production significantly outpacing demand:

• Zinc mine production jumped to 10.51 million MT (up from 9.87 million MT in 2024)
• Refined zinc output rose to 11.52 million MT (compared to 11.12 million MT previously)
• Demand reached only 11.44 million MT, up modestly from 11.19 million MT

Yet paradoxically, London Metal Exchange stockpiles collapsed from 230,325 MT on January 2 to just 33,825 MT by November 1—a 85 percent drop. Low inventories are sustaining price support even as producers churn out more metal.

2026: Supply surge meets sluggish demand

The zinc price picture for 2026 looks more constrained. The ILZSG expects global refined zinc demand to grow by just 1 percent to 13.86 million MT. Chinese demand is forecast flat after a 1.3 percent gain in 2025, as the real estate slump persists. US housing growth depends heavily on whether Trump administration policy proposals can unlock the mortgage rate deadlock.

Meanwhile, supply is poised to accelerate. Zinc mine output is expected to climb 2.4 percent to 12.8 million MT, driven by new production coming online:

• Restart of Portugal’s Almina-Minas Aljustrel mine
• Commissioning of Bunker Hill Mining’s flagship Idaho operation
• Commercial production launch at the Xinjiang Huoshaoyun mine (set to become the world’s sixth-largest lead-zinc mine)

Refined zinc production will likely grow another 2.4 percent to 14.13 million MT, supported by increased concentrate availability in Brazil, Canada, Norway and China. The result? The ILZSG is predicting a whopping 271,000 MT global surplus in 2026.

What does this mean for the zinc price in 2026?

Fastmarkets’ December report suggests upward momentum from the 2025 LME average of US$3,218 could continue through H1 2026, particularly as Chinese production runs at surplus while other regions fall short. However, the consensus shifts bearish for H2 2026 as global surpluses become evident and prices decline accordingly.

Morgan Stanley recently revised its 2026 zinc price forecast to an average of US$2,900 per MT, suggesting a pullback from current levels. Argus reports that long-term contract negotiations have slowed due to tight LME inventories, creating near-term uncertainty and supporting prices—but this dynamic likely won’t persist once new supply floods the market.

One wildcard: geopolitics and critical mineral status

Zinc carries strategic importance. The US classifies it as a critical mineral essential for galvanized steel used in infrastructure and defense. South32’s Hermosa project already received FAST-41 approval, streamlining its regulatory pathway. Escalating trade tensions between the US and China—the world’s largest zinc producer—could shift demand patterns, benefiting Western producers.

The bottom line

The zinc price faces a structural headwind: ample supply meeting anemic demand growth. While near-term support from low LME inventories may cushion downside risks, the medium-term outlook tilts bearish as new mines come online. For investors, this volatility could present opportunities for those willing to play the long game and wait for market dynamics to stabilize.