Zinc prices, which have dropped over 2.5 per cent in the past week, will likely be supported by supply-side risks, though the trade could remain volatile, analysts have said.
“Zinc prices are expected to remain supported by supply‐side risks, even as zinc consumption growth slows to 1.9 per cent in 2026, from 2.2 per cent in 2025,” said research agency BMI, a unit of Fitch Solutions.
The recent sharp decline was the result of a confluence of four bearish factors – demand vacuum, profit-booking, surplus of refined material in February and retreat of macro-economic risk appetite, said SurnSirs Commodity data group.
Price forecast
“We are revising our 2026 zinc price forecast to $2,950/tonne from $2,780/tonne previously, with prices set to remain underpinned by persistent input-cost pressures,” said BMI.
Zinc prices have averaged $3,277/tonne year-to-date as of April 17 and are up 8 per cent year-on-year, extending the 2025 momentum, when prices averaged $2,867/tonne, supported by sizeable stock withdrawals and growing expectations of tighter supply.
In its Commodity Outlook, the World Bank said global zinc production is expected to increase modestly in 2026, with rising mine output in major producing countries improving concentrate availability, but elevated energy costs tempering the expansion of refined output. “Against this backdrop, prices are forecast to increase by about 5 per cent in 2026,” it said.
Iran war disruptions
Zinc prices increased in the first quarter this year by 2 per cent compared with the last quarter of 2025, and extended gains in April. This was due to disruptions to zinc concentrate supplies linked to the conflict in West Asia, and weaker deliveries from other sources hindered Chinese smelting output, the World Bank said.
BMI said zinc prices experienced volatility in the first quarter, with early-year gains driven by supply-side concerns later offset by macro-led uncertainty following the escalation of the US-Iran conflict in late February.
In recent weeks, prices have rebounded as the conflict intensified concerns around the availability of key inputs, exacerbating existing pressures on smelters, it said.
SunSirs said “demand vacuum” effect emerged ahead of the holiday; with the May Day holiday approaching, downstream galvanising, die-casting, and zinc oxide enterprises universally halted production or reduced operating loads in advance, raw material procurement came to a near standstill, and trading activity in the spot market ground to a halt.
Chinese property sector weakness
It said a concentrated wave of profit-taking from positions established at high levels emerged since the rebound began in March. Zinc prices neared a three-and-a-half-year high—leaving long-position holders with substantial profits—and a rush to exit positions for risk-aversion purposes ahead of the holiday triggered a sell-off panic.
BMI said the announcement of a ceasefire in early April between the US and Iran briefly eased inflation fears and calmed concerns over the conflict’s impact on global economic growth. It added a layer of price support before renewed uncertainty over its durability reinforced volatility.
“We expect risks stemming from the conflict to remain two-sided, with demand-side pressures likely to cap price growth, while conflict-related input disruptions present upside risks,” it said.
The World Bank said continued weakness in China’s property sector is expected to weigh on steel consumption and galvanizing activity, dampening zinc demand in 2026–27.
Reversal of balance
“Rising zinc consumption related to growing global investment in infrastructure, power grids, and renewable energy installations is likely to provide some offset, resulting in modest global demand growth overall,” it said.
SunSirs said the supply-demand landscape has undergone a substantive reversal, per the latest data from the ILZSG (International Lead and Zinc Study Group. It indicates that in February, the global market for refined zinc shifted from a deficit of 21,900 tonnes to a surplus of 49,600 tonnes, while the full-year surplus forecast for 2026 was revised upward to 175,000 tonnes.
BMI said the Iran war has compounded pre-existing tightness in the sulphur market. It has exacerbated input-cost risks for smelters and emerged as a key driver of prices.
Initial concerns around sulphuric acid availability stemmed from Russia’s export ban on sulphur introduced in late 2025 and subsequently extended into 2026, which curtailed a significant source of global supply.
Under broader pressure
“The situation that has since been materially exacerbated by disruptions linked to the escalation of the conflict in West Asia, a key global supplier of sulphur and sulphur feedstocks,” said the research agency.
SunSirs said that with the US Federal Reserve’s May monetary policy meeting approaching and the US Dollar Index trending stronger, industrial metals as a sector have come under broad pressure.
The World Bank said improving supply—driven by higher mine output—and weak consumption growth are then expected to lead to a price decline of about 8 percent in 2027.
BMI said for the remainder of 2026, zinc price movements are expected to remain volatile, shaped by persistent supply-side pressures and heightened sensitivity to geopolitical and macroeconomic developments linked to developments in West Asia.
Published on April 30, 2026
