Zinc futures declined to $3,670 per tonne in mid-October, their lowest level since early August, pressured by expectations of higher Chinese zinc concentrate supply and a stronger US dollar. Chinese mine output is forecast to increase month-on-month in October as production resumes at operations previously halted by accidents and safety inspections.
Supply concerns, however, remain pronounced in Western markets, where zinc production fell 3.4% year-on-year in the first half of 2026 amid elevated energy costs and constrained raw material availability. Additional downside risk stems from the outcome of Nyrstar’s strategic review of its loss-making Budel smelter in the Netherlands, which could further affect regional supply.
At the same time, rising Chinese exports have helped ease tightness on the LME, though the benchmark spread remains in backwardation, indicating that nearby supply conditions are still relatively tight. A firm US dollar has added further pressure by making dollar-denominated commodities more expensive for holders of other currencies.