Key Takeaways
- LME zinc fell to $3,670 per tonne, its lowest level since early August.
- Chinese mine output is expected to recover in October as operations resume after disruptions.
- Western refined zinc production fell 3.4% year-on-year in the first half of 2026.
- Higher Chinese exports have eased some overseas supply pressure, but nearby metal remains relatively tight.
Zinc prices fell to $3,670 per tonne on the London Metal Exchange (LME), their lowest level since early August. The decline comes as Chinese mine production is expected to recover in October, raising the prospect of better supplies of zinc concentrate. A stronger US dollar has also pressured prices. However, refined zinc production has fallen in Western markets, where smelters continue to face high energy costs and difficulty securing raw materials. Uncertainty over the future of Nyrstar’s smelter in the Netherlands has added another concern for the market. While higher Chinese exports have eased some overseas supply pressure, the decline in prices does not mean all availability issues have been fixed.
Chinese Mine Supply Outlook And A Strong Dollar Weigh On Zinc
Zinc prices have come under pressure as expectations for Chinese mine production improve. Mining operations affected by accidents and safety inspections are resuming, and output is expected to increase in October. That could give smelters access to more zinc concentrate, the raw material used to produce refined zinc.
The outlook for mine supply has changed, but the effect on refined production may take time to show. Chinese refined zinc output fell 1.9% month-on-month and 6.4% year-on-year in September 2026. The figures show that smelter production remained under pressure even as expectations for mine output began to improve. A recovery in concentrate supply could ease some of that pressure, but it does not guarantee an immediate increase in refined zinc. Smelters must still manage operating costs and raw material availability, both of which can affect how much metal they produce.
The US dollar has added another factor for traders to consider. Since zinc is priced internationally in dollars, a stronger US currency makes the metal more expensive for buyers using other currencies. That can weigh on demand and prices, although the impact depends on wider market conditions. A better supply outlook in China and a stronger dollar have pushed zinc down to $3,670 per tonne, its lowest level since early August. However, the expected recovery in mine output is only one part of the market. Conditions at Western smelters and the availability of refined metal will shape price development from here.
Western Production Constraints Keep The Zinc Supply Outlook Mixed
Supply conditions outside China remain a market concern. Western refined zinc production fell 3.4% year-on-year during the first half of 2026. Higher energy costs and limited raw material availability have affected smelter operations, making it difficult to assess the broader market based on Chinese mine output alone. Another point of uncertainty is Nyrstar’s Budel smelter in the Netherlands. The company announced a strategic business review on September 24, citing pressure from Chinese overcapacity, competition for feedstock, low treatment and refining charges, and high European energy costs. Its official announcement said the review would consider future options for the site. The outcome could affect regional zinc production, but any potential reduction in output should not be treated as confirmed until a decision is announced.
Higher shipments from China have helped ease pressure in the LME market. However, the benchmark spread remains in backwardation, meaning cash zinc trades at a premium to futures for later delivery. This structure generally indicates that buyers are paying more for metal available immediately, pointing to continued tightness in nearby supply. The price decline therefore reflects changing expectations rather than a complete resolution of supply constraints. If Chinese mine output improves as expected, concentrate availability could ease. But Western production pressures, the Budel review, and physical market conditions remain relevant to the outlook. Zinc prices will continue to respond to how these competing factors develop, alongside movements in the US dollar and demand from industrial buyers.
