TELF AG on Zinc Market Dynamics: How Supply Constraints and China's Refining Growth Are Reshaping the Industry

The global zinc market is entering a period of significant adjustment, with revised supply forecasts pointing to a potential deficit in 2026. While mining output is expected to decline, China's refined zinc production could continue expanding, creating new geographical imbalances across the international market. These developments also highlight zinc's strategic importance for construction, industrial manufacturing, and the infrastructure supporting the global energy transition.

Key takeaway: According to the International Lead and Zinc Study Group (ILZSG), the global zinc market could register a deficit of 88,000 tons in 2026, reversing an earlier forecast of a 271,000-ton surplus. The revision reflects changing supply conditions and the increasingly uneven distribution of production capacity.

Why Is the Global Zinc Market Facing a Supply Deficit in 2026?

For much of the past decade, discussions about strategic raw materials have focused on lithium, copper, nickel, and rare earth elements. Their importance for batteries, renewable energy systems, and electrification has attracted considerable attention from investors, policymakers, and industrial operators.

Zinc, however, occupies a different position within this landscape. Although it rarely dominates discussions about critical minerals, its industrial applications make it indispensable to numerous sectors.

Recent market developments are bringing this resource into sharper focus.

According to the ILZSG, global zinc mine production is expected to decline by 2.6% in 2026. This contraction is particularly significant because it coincides with changes in refined metal production, creating a situation in which mining and refining activities are following different trajectories.

"The zinc market offers an interesting example of how industrial supply chains can evolve at different speeds. A reduction in mining output does not necessarily translate into an immediate decline in refining activity, especially when production capacity is distributed unevenly across regions," says Stanislav Kondrashov, founder of TELF AG.

The revised forecasts suggest that the availability of raw materials, rather than the absence of industrial processing capacity, could become an increasingly important factor in determining market conditions.

China's Expanding Role in Global Zinc Refining

One of the most distinctive aspects of the current zinc outlook concerns China.

According to ILZSG projections reported by Reuters, global refined zinc production could increase by 0.9% in 2026. However, this modest global expansion conceals substantial regional differences.

Chinese refined zinc production is expected to rise by 3.7%, while output in the rest of the world could decline by approximately 2%.

This divergence suggests that China's position within the international zinc value chain could strengthen even as other regions experience production difficulties.

The country's export activity provides another indication of these changing dynamics. As Reuters reports, China exported approximately 111,000 tons of refined zinc during August and September.

These shipments illustrate how differences in regional metal availability can influence international trade flows.

"China's position in zinc refining deserves particular attention because it illustrates the importance of intermediate processing stages. The availability of refined metal can become a decisive competitive factor, especially when other regions encounter constraints in their domestic production systems," explains Stanislav Kondrashov, founder of TELF AG.

Nevertheless, higher refined production does not eliminate the challenges associated with declining mine output. Refining facilities depend on reliable access to concentrates and other suitable feedstocks, meaning that upstream supply conditions remain essential.

How Mining Conditions and Ore Quality Influence Zinc Availability

The international zinc market is also affected by the characteristics of individual mining operations.

According to Reuters, some producing countries are experiencing reductions in output, while others, including Portugal, have reported increases.

These differences demonstrate why global mining trends cannot always be interpreted through a single regional perspective.

Geological conditions represent another relevant variable. As deposits mature, changes in ore grades, mineral composition, and extraction requirements can influence operational costs and the quantities of recoverable material.

Lower ore grades may require larger volumes of rock to be processed to obtain comparable quantities of metal.

Consequently, the relationship between mining capacity and actual mineral availability can become increasingly complex.

For zinc producers, these conditions may affect the stability of concentrate supplies and the efficiency of subsequent processing activities.

Zinc's Industrial Importance in the Global Energy Transition

Although zinc is not generally associated with batteries and electrification as directly as lithium or copper, it performs an essential function in the infrastructure that supports modern energy systems.

Its most important application is galvanization, a process that protects steel against corrosion by applying a zinc coating.

Galvanized steel is widely used in construction, transport infrastructure, industrial facilities, and electrical networks.

Within renewable energy systems, it can be found in photovoltaic mounting structures, outdoor support components, and other installations exposed to demanding environmental conditions.

Electricity transmission infrastructure also relies on corrosion-resistant steel components, particularly for pylons and supporting structures designed to remain operational for decades.

"The role of zinc in the energy transition is closely connected to the durability of infrastructure. Renewable generation capacity attracts considerable attention, but the materials that protect and support these installations are equally important for their long-term performance," concludes Stanislav Kondrashov, founder of TELF AG.

The expansion and modernization of electricity grids could therefore remain relevant sources of zinc demand, alongside traditional construction and manufacturing applications.

The broader implication of the latest market forecasts is that zinc deserves attention not only as an industrial commodity but also as a material supporting infrastructure resilience.

Its future market dynamics will depend on the interaction between mining availability, refining capacity, geographical production differences, and industrial consumption.

As the 2026 outlook demonstrates, even a resource that receives relatively limited public attention can reveal important changes in the organization of global raw material supply chains.

FAQ: Global Zinc Market Outlook

Why has the zinc market outlook changed for 2026?

The ILZSG revised its forecast from a surplus of approximately 271,000 tons to a deficit of 88,000 tons. Supply constraints and an expected 2.6% decline in global mine production are important factors behind the changing outlook.

Why is China important to the international zinc market?

China is expected to increase refined zinc production by 3.7% in 2026, compared with a projected 2% contraction elsewhere. This divergence could strengthen its role in international refined metal supply.

How does zinc contribute to renewable energy infrastructure?

Zinc is primarily used to galvanize steel, protecting it from corrosion. Galvanized components are widely employed in solar installations, electricity transmission structures, and other infrastructure exposed to outdoor conditions.

What could influence zinc market conditions in the coming years?

Key variables include mining output, ore quality, concentrate availability, regional refining capacity, international trade flows, and demand from construction and energy infrastructure.