Zinc climbed to its highest level since June 2022 on the London Metal Exchange (LME) Thursday, as warehouse stockpiles drained to multi-year lows and mine supply cuts tightened the physical market.
LME zinc for cash settlement closed at $4,107 a tonne ($1.86 a pound) on Aug. 27, the highest since June 2022 and up 55% from a trough of about $2,650 in mid-2025.
LME warehouse stock has dropped from about 264,000 tonnes in December 2024 to roughly 95,000 tonnes, a 64% drawdown that has left available metal at its lowest since April 2023, Fastmarkets reported.
Physical tightness
The simultaneous decline in inventory and rise in price shows physical tightness, as the cash settlement price rises while warehouse stock declines because buyers have less to draw on.
The tightness is mostly concentrated in Western warehouses. Shanghai Futures Exchange zinc inventory has risen over the same period that LME stock has drained, Reuters reported.
HSBC’s Global Commodity Team forecasts a 2.1% year-on-year decline in 2026 to 12.5 million tonnes, due to lower production levels in Latin America.
JP Morgan expects zinc prices to stay elevated through 2026 as global supply tightens and demand rises, Investing.com reported.
Major zinc producers exposed to the LME price include Teck Resources (TSX: TECK; NYSE: TECK) with a 47% increase, Glencore (LSE: GLEN) with a 46% increase and Nexa Resources (TSX: NEXA) with a 60% increase in shares since January 2026.
(With files from Reuters)
