The recent interesting developments in the zinc market are worth paying attention to. I just looked at some market data for 2026 and found that the situation with zinc is quite complex—on the surface, prices are rebounding, but supply pressure is actually quite significant.

Let’s start with last year’s situation. In 2025, zinc prices went through a rollercoaster. At the beginning of the year, they were at 2,927 US dollars per ton, but by the end of April, they fell directly to 2,562 US dollars, a decline of nearly 14%. The main reason was market panic triggered by Trump’s tariff policies; investors worried that this would affect demand from real estate and manufacturing. However, as the risks eased, prices slowly climbed back up, closing the year at 3,088 US dollars. Overall, zinc price performance in 2025—from the low point to year-end—was still quite strong.

But there is a hidden risk here. Even though prices are rising, the market has actually been in a state of supply surplus all along. The International Lead and Zinc Study Group predicts a surplus of 85,000 tons in 2025. More importantly, even though there is an oversupply, inventories at the London Metal Exchange are actually declining—from more than 230,000 tons at the beginning of the year to only 33,000 tons by November. This contrast is quite interesting, suggesting that demand for zinc still exists, just not very stable.

The outlook for 2026 deserves even more attention. Market research institutions expect global refined zinc demand to grow by only 1%, reaching 13.86 million tons. That growth rate is too low. At the same time, new mine capacity is coming online—Portugal, Australia, Brazil, Congo, and China all have new or restarted projects. In particular, the Huoshiyun mine in Xinjiang is about to start production, which will make it the world’s sixth-largest lead-zinc mine. Refined zinc output is expected to grow by 2.4%, reaching 14.13 million tons. As a result, an estimated 271,000 tons of supply surplus is expected in 2026.

From the perspective of price forecasts, Fastmarkets believes there will still be upward momentum in the first half of the year, but the second half may face pressure. Morgan Stanley’s average price expectation for 2026 is 2,900 US dollars per ton. Considering that it’s already May now, the first-half market trend has basically already been realized; after this, it will come down to whether supply pressure in the second half can keep prices down.

What’s interesting is that the continued slump in China’s real estate market is persistently dragging down demand. Last year, Chinese real estate developers’ sales fell by 36% year over year. This year, although the government is providing stimulus, the effect is limited. In the United States, things aren’t much better either: high home prices and high interest rates have stalled new home starts. These are all direct factors suppressing zinc demand.

However, there are also positive signals. The United States has classified zinc as a strategic critical mineral, which means domestic supply will receive more attention. Policies recently proposed by the Trump administration may stimulate U.S. infrastructure investment, which would help zinc demand. Tensions in China-U.S. trade relations could even be beneficial for Western zinc producers.

Overall, this is the situation for the zinc market in 2026: capacity will increase, demand growth will be slow, and prices may continue to face downward pressure. For investors who want to participate, they may need to be patient and wait to see whether the supply-demand landscape in the second half of the year changes. At times like this, it can actually create opportunities for people with patience.