- LME zinc hits 4-year high on tight supply, low treatment charges
- HZL raises benchmark SHG zinc ingot price by INR 12,600/t
India’s zinc ingot (99.995%) prices rose sharply by INR 16,300/t w-o-w to INR 421,100/t ex-Delhi, according to BigMint’s assessment on 25 August 2026. The increase was supported by a sharp rise in Hindustan Zinc Ltd’s (HZL) benchmark price and stronger international zinc prices, with LME zinc touching a four-year high. However, recovering exchange inventories and cautious downstream buying could temper further gains.
HZL hike and stronger LME prices drive domestic zinc higher
Domestic zinc prices strengthened sharply during the week, tracking the increase in HZL’s benchmark price and the rally in international markets.
HZL raised its benchmark Special High Grade (SHG) zinc ingot price by INR 12,600/t to INR 418,400/t on 24 August, from INR 405,800/t previously. The revision provided a strong upward reference for domestic spot prices.
BigMint’s zinc SHG ingot assessment subsequently increased to INR 421,100/t ex-Delhi on 25 August, from INR 404,800/t on 18 August.
International markets also provided strong support. LME three-month zinc rose to $3,853/t on 25 August, from $3,724/t on 18 August, while cash-settlement prices increased to $3,987/t from $3,795/t.
The sharp rise in international replacement costs encouraged domestic sellers to raise offers. However, downstream buyers remained cautious at elevated price levels and continued to focus largely on immediate requirements rather than aggressive inventory building.
LME zinc hits 4-year high amid tight physical market
LME zinc three-month futures climbed to a four-year high of $3,858/t on 25 August, as tight nearby availability and strong investment positioning continued to support the market. The cash-to-three-month spread also remained elevated, with the cash premium reaching around $131/t, indicating continued tightness in prompt material.
LME zinc inventories, however, recovered to 95,050 t on 25 August, from 86,525 t on 18 August. The increase provides some relief to immediate supply concerns, although stocks remain below the 97,075 t recorded on 11 August.
The broader physical market remains supported by constrained concentrate availability. Zinc treatment charges have fallen deeply negative, with spot charges in China reported at around -$117.50/t, reflecting intense competition among smelters for concentrate feedstock.
At the same time, China’s refined zinc surplus is beginning to flow into the international market. Chinese exports, including deliveries into LME warehouses in Hong Kong, are providing some relief to the tight London market and could increase if the arbitrage remains attractive.
This creates a more balanced near-term picture: tight availability outside China continues to support prices, while rising Chinese exports and recovering LME stocks could gradually ease the squeeze.
Korean zinc remains below domestic prices
South Korean SHG zinc was offered at around INR 416,000/t in India, below the BigMint domestic assessment of INR 421,100/t.
South Korean import premiums were heard at around $250-255/t, while imported material was indicated at around $4,140-4,145/t.
Australian-origin zinc was offered at around INR 437,000/t, keeping it significantly above both domestic and Korean-origin material.
The lower Korean offers could provide some price competition to domestic material. However, actual import flows will depend on shipment availability, lead times and the economics of bringing material into India at elevated international prices.
Zinc alloy prices follow primary metal higher
Zinc alloy prices also increased alongside higher primary zinc replacement costs.
Zamak 3 was heard at around INR 429,000/t, while Zamak 5 was around INR 436,000/t. PMI prices were heard at around INR 385,000/t.
Downstream alloy demand remained moderate, with buyers continuing to procure cautiously at elevated zinc prices. Higher primary metal costs supported alloy quotations, although the pace of buying remained restrained.
Coated steel market remains firm
Zinc-linked coated steel prices remained firm during the week. Mumbai galvanised plain (GP) coil increased by INR 500/t w-o-w to INR 75,700/t ex-Mumbai, while pre-painted galvanised iron (PPGI) at INR 85,300/t and bare galvalume (BGL) at INR 90,000/t remained unchanged.
The rise in GP coil was supported by firmer raw material costs, although cautious downstream buying continued to limit broader gains.
Outlook
India’s zinc ingot market is likely to remain firm in the near term, with domestic prices continuing to take cues from HZL’s benchmark pricing, LME zinc and import replacement costs.
The key support remains the tight physical structure in the international market, reflected in elevated cash premiums and deeply negative treatment charges. However, the recent recovery in LME inventories and increasing Chinese exports into the LME system could provide additional metal to the market and reduce some of the immediate supply pressure.
For India, Korean zinc at around INR 416,000/t is currently below the domestic assessment of INR 421,100/t, creating some scope for import substitution if availability improves. Australian material remains less competitive at around INR 437,000/t.
Domestic buyers are likely to remain selective at current price levels, particularly after the sharp weekly increase. The next direction will depend on HZL’s pricing, LME price momentum, the pace of Chinese exports and inventory inflows, Korean material availability and downstream buying response.
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