Zinc

Zinc's job is mostly invisible: roughly 60 percent of it is used to galvanize steel, the thin sacrificial coating that keeps bridges, car bodies, guard rails, and transmission towers from rusting. That ties demand to construction and infrastructure, with China consuming roughly half of the world's 13.5 million refined tonnes a year. But the distinctive feature of the zinc market is that it is two markets stacked on top of each other: a mining market for concentrate and a smelting market for refined metal, joined by the treatment charge (TC), the fee smelters earn for conversion. The TC is the market's best barometer. When mines are short, TCs collapse and smelters bleed; when concentrate is plentiful, TCs fatten and the bottleneck moves downstream.

Both failure modes hit within three years. In 2021 and 2022 the European energy crisis made electricity-hungry smelting uneconomic, and roughly half of Europe's zinc smelting capacity went offline: Nyrstar idled Budel in the Netherlands, Glencore curtailed Portovesme in Italy, and the LME price hit an all-time high of $4,896 a tonne on March 8, 2022. Then the problem inverted: a string of mine closures and delays left concentrate so scarce through 2024 that spot treatment charges went negative, an almost unprecedented condition in which smelters effectively paid for feed, and Chinese smelters coordinated output cuts. New mine supply from Russia's Ozernoye and the restart of Australia's Century tailings operation eased the squeeze into 2025, but the structural pipeline stays thin: Teck's Red Dog in Alaska, one of the largest mines, depletes toward the end of the 2020s.