Polarized zinc becomes a bull-bear battleground
GLD•Record long and short positions have left zinc traders divided as the International Lead and Zinc Study Group forecasts an 88,000-ton global supply shortfall in 2026, reversing its prior projection of a 271,000-ton surplus. It expects a 25,000-ton surplus in 2027.
1. Supply outlook reverses
The International Lead and Zinc Study Group now expects the global zinc market to have an 88,000-ton supply shortfall in 2026, compared with its forecast a year earlier of a 271,000-ton surplus. Mined zinc output is expected to fall 2.6% year on year, while demand is barely growing amid weak construction activity, particularly in China.
2. China exports zinc
China's refined zinc output is expected to rise 3.7% this year from 2025, while production elsewhere is forecast to contract 2.0%. China exported 111,000 tons of refined zinc in August and September, helping lift LME stocks from 92,550 tons in August to 165,650 tons, though cancellations and physical load-outs have tightened nearby supply.
3. Traders remain divided
Record fund short positions coexist with long positioning near record highs. The LME cash premium over three-month metal rose to $118 per ton from less than $50 over the past week, and three-month zinc climbed from $3,650 per ton on October 15 to a Tuesday high of $3,855. The group forecasts mined supply growth of 3.0% in 2027 and a 25,000-ton surplus, while warning that short-term conditions depend on China's ability to maintain exports.
