The International Lead and Zinc Study Group (ILZSG) now expects the refined zinc market to end 2026 with an 88,000-tonne shortfall, far larger than it forecast in April. It sees a small 25,000-tonne surplus in 2027 as production outpaces demand.
At a glance
- The ILZSG raised its 2026 refined zinc deficit forecast to 88,000 tonnes from 19,000 tonnes in April.
- It expects refined zinc production to rise 2% to 14.21 million tonnes in 2027, slightly above demand of 14.19 million.
- China's zinc demand growth is forecast to slow to 0.3% in 2027 from 1.8% in 2026.
Background
The International Lead and Zinc Study Group is an intergovernmental body that publishes supply and demand forecasts for both metals twice a year. A deficit means the world uses more refined zinc than it produces, which draws down inventories and tends to support prices. Zinc is mainly used to galvanise steel, coating it to stop rust.
What the study group said
The ILZSG expects the global refined zinc market to show a deficit of 88,000 tonnes in 2026, Reuters reported on October 19. That is much larger than the 19,000-tonne deficit the group forecast in April. It sees the market swinging to a surplus of 25,000 tonnes in 2027.
For 2027, the group forecasts refined zinc demand rising 1.2% to 14.19 million tonnes, led by Europe, India and the United States. Refined production is expected to grow faster, by 2% to 14.21 million tonnes.
Why the balance shifts
More zinc ore is coming. The ILZSG expects zinc mine output to rise 3% to 12.78 million tonnes, with more concentrate available from Canada, Japan, Kazakhstan and Peru. More concentrate lets smelters produce more refined metal.
Demand growth is slowing in China, the largest consumer. The group sees Chinese zinc demand rising just 0.3% in 2027, down from 1.8% in 2026, because of lower real estate investment. Rising exports of manufactured goods should keep supporting Chinese industrial activity.
What it means for lead
The study group expects the refined lead surplus to widen from 90,000 tonnes in 2026 to 163,000 tonnes in 2027. Lead demand is forecast to rise 1% to 13.92 million tonnes in 2027, while supply grows 1.5% to 14.08 million tonnes.
Our read
Outlook: bearish. A forecast swing to surplus in 2027, with faster supply growth and slower Chinese demand, points to easing tightness after this year's larger deficit.
What to watch
- Zinc concentrate shipments from Canada, Kazakhstan and Peru, which drive the forecast rise in mine output.
- Chinese real estate investment, the main reason for slower zinc demand growth.
- The ILZSG's monthly market data as 2026 closes against its 88,000-tonne deficit forecast.
For information only, not investment advice.
Zinc price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-10-19: The ILZSG publishes forecasts showing an 88,000-tonne zinc deficit in 2026 and a 25,000-tonne surplus in 2027.
Demand Drivers
Demand growth in Europe, India and the US offsets a slowdown in China to 0.3% in 2027.
Supply Drivers
Zinc mine output is forecast to rise 3% to 12.78 million tonnes, adding concentrate for smelters.
Global Consumption
Global refined zinc use is forecast at 14.19 million tonnes in 2027, up 1.2%.
What could lift prices
- The 2026 deficit forecast more than quadrupled from April's estimate, showing tighter supply this year.
- The 2027 surplus of 25,000 tonnes is small relative to 14.19 million tonnes of demand.
What could weigh on prices
- Refined production is forecast to grow faster than demand in 2027.
- Chinese zinc demand growth is expected to slow sharply as real estate investment falls.
Country impact
| Country | Impact | Reason |
|---|---|---|
| China | High | Slower Chinese demand growth is a key reason for the forecast 2027 surplus. |
| Peru | Medium | More concentrate from Peru adds to the expected rise in zinc mine output. |
| India | Medium | India is among the regions leading zinc demand growth in 2027. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Base Metals Mining | Negative | A move to surplus in 2027 could weaken prices for zinc and lead miners. |
| Steel Manufacturing | Positive | Easier zinc supply in 2027 could lower coating costs for galvanisers. |
Who gains, who loses
- Zinc smelters: More concentrate from Canada, Japan, Kazakhstan and Peru eases their raw material supply.
- Lead producers: The lead surplus is forecast to widen to 163,000 tonnes in 2027.
Other ways this could play out
- If mine output growth disappoints, the zinc market could stay in deficit in 2027.
- If Chinese property investment falls further, the 2027 surplus could be larger than forecast.
Price risks
- Smelter disruptions could cut refined output and keep the market in deficit.
- Stronger demand in Europe, India or the US could absorb the forecast surplus.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
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