Zinc Prices Hit Over Four-Year High as Supply Tightening Drives 27% Year-to-Date Gain
nashnova research
Zinc touched $3,980.50 a ton on September 1 — a four-year high — extending a 27% year-to-date gain that leads all base metals; mine disruptions and negative smelter fees signal a supply chain under real stress.
Why is zinc outrunning copper and aluminium?
LME zinc futures rose as much as 2.5% intraday on September 1, hitting $3,980.50 per ton — the highest in over four years.
Year-to-date, zinc is up 27%, well ahead of copper and aluminium. This means → the market is pricing a zinc-specific "something is wrong with supply" premium, not just riding a broad metals rally.
Zinc posted its fifth consecutive monthly gain in August, with no reversal signal yet.
What exactly went wrong on the supply side?
Middle East tensions have blocked Iranian ore exports, while mines in China and elsewhere also saw production interruptions — two supply sources tightening at once.
Chaos Ternary Futures noted "frequent supply-side disruptions" in a research note and forecast that China will increase zinc metal exports to ease global tightness.
In plain terms = less ore is being mined and shipped, shrinking the global raw-material pool, while demand has not fallen in step — so prices get pushed up.
Smelter fees went negative — what does that tell us?
By late August, treatment charges — the processing fee smelters collect when they buy concentrate from miners — slid to negative $117.50 per ton, a recent low.
This means → the concentrate shortage is so severe that smelters are effectively paying miners to secure supply, accepting tougher contract terms, though they can offset some losses by selling by-products.
This reflects stress that has spread from the mine level to the smelting level — the entire supply chain is bearing the cost of a raw-material shortfall.
How long can low inventories hold?
LME zinc stocks have ticked up slightly but remain below 100,000 tons — low by historical standards.
In plain terms = inventories act as a cushion — the thinner the cushion, the faster and harder any new supply disruption hits prices.
Two variables will decide whether zinc stays elevated: whether supply-side relief materialises, and whether Chinese zinc exports are large enough to ease the global stock deficit. If either falls short, prices stay high.
Copper is rising too — is the logic the same?
Copper gained 0.6% on the same day to $14,382 per ton, also trending higher.
But the supply story differs: large volumes of copper metal are being shipped to the U.S., squeezing supply for the rest of the world rather than reflecting a mine-output breakdown.
Put simply = zinc's problem is "can't dig it out"; copper's problem is "one big buyer is hoarding it." Both leave everyone else short, but the root causes differ — and the price paths may diverge.
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