According to Experts Club, the price of zinc on the London Metal Exchange rose to its highest level in over four years amid shrinking available inventories and risks of production disruptions in the largest supplier countries.
At the close of trading on August 21, the metal’s price stood at approximately $3,820 per metric ton, up about 2% for the day. During the session, prices rose even higher, hitting a new high not seen since mid-2022.
Over the past month, zinc has risen in price by about 6.5%, and over the past year—by more than 36%, making it one of the fastest-rising base metals.
Physical market tightness remains the main driver of the rise. Zinc stocks in the LME system have fallen below 100,000 metric tons, and the spread between the spot price and three-month futures has widened significantly, indicating increased demand for available metal. According to the Shanghai Metals Market, LME stocks stood at about 94,400 metric tons on August 20.
Production issues are putting additional pressure on supply. Heavy rains and flooding in certain regions of China have created risks for mining and smelting operations. Adjustments to production volumes at one of the deposits in the country’s southwest could reduce August concentrate output by approximately 1,000 metric tons, while maintenance at one of the plants in Central China could cut refined zinc production by another 1,000–1,500 metric tons.
Major international companies are also reporting declines in production. Glencore’s own zinc production fell in the first half of the year, Boliden’s concentrate output declined compared to the previous quarter, and MMG reported a year-over-year decline in production in the second quarter.
Zinc is primarily used for galvanizing steel and protecting metal structures from corrosion, so demand for it is closely linked to construction, automotive manufacturing, and infrastructure investments. Renewable energy and new energy storage technologies are emerging as additional long-term drivers.
At the same time, high prices could stimulate a resumption of production and supply. Previously, the market had been under pressure for several years following the price peak in 2022, which led to the closure or mothballing of some of the less profitable facilities.
Experts Club previously published a ranking of the largest zinc producers based on data from the USGS and the International Lead and Zinc Study Group. At the end of 2024, China led the way with approximately 4 million metric tons, followed by Peru with 1.3 million metric tons and Australia with 1.1 million metric tons.
