- Chinese smelters face mounting pressure from negative treatment charges
- Expected output cuts could accelerate zinc price gains in H2 2026
Metal Intelligence Centre: According to the latest positioning report for the week ending June 5, 2026, total bullish positions in zinc surged to a record 87,879 lots, while bearish positions stood at 39,938 lots. Consequently, the bull-bear ratio climbed to 2.20, reflecting strong positive sentiment toward the metal.
The optimistic outlook is largely underpinned by a series of supply-side disruptions affecting the global zinc concentrate market. The ongoing conflict in the Persian Gulf has disrupted Iranian zinc supplies, while output from a major new mine in Russia has fallen short of expectations. In addition, shipments from a zinc mine in Cuba have been halted due to the US blockade of the island, further tightening concentrate availability.
The supply squeeze is increasingly being felt in China, the world’s largest producer of refined zinc. Chinese smelters are facing a worsening shortage of feedstock, which has driven treatment charges for imported zinc concentrate to a record low of minus $50 per ton, according to Fastmarkets data. The collapse in processing fees has severely eroded smelter profitability, prompting several producers to reduce output.
Although international zinc prices have already risen around 14% this year amid a broader rally in base metals, the Chinese zinc market has remained relatively oversupplied due to weaker steel demand, says analyst Liu Xiaoyi from Zijin Tianfeng Futures Co. However, expected smelter production cuts are likely to reduce this surplus in the coming months, providing further support to zinc prices and reinforcing the market’s increasingly bullish outlook.
Note: This article has been published as part of a content partnership between MIC and BigMint.
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