ILZSG Says 19,000 Tonnes—But That's Not Really the Story at All

By Siam Sukkhee Trading Co., Ltd — 2026-07-16 — zinc ingot supply demand

I looked at the ILZSG report from Lisbon last week. Nineteen thousand tonnes.

That's the refined zinc deficit they're forecasting for 2026, and it's genuinely the thinnest margin I've seen them call for in a while.

On 14 million tonnes of global demand, 19,000 tonnes is what, 0.13 per cent? You can lose that in a spreadsheet rounding error, something like that. The ILZSG says demand climbs 1.3 per cent to 14.00 million. Supply grows 1.4 per cent to 13.99 million. The math is almost too neat to believe, which probably means it shouldn't be believed at face value.

Here's the thing though.

When a market sits this close to balance, it stops being about fundamentals and starts being about execution. One smelter goes dark for two weeks. One mine in Peru has a labour issue. Energy prices spike in November. Any of that rewrites the story entirely. This isn't a supply crunch yet. But it's the kind of balance where a single operational hiccup gets amplified across the entire system before anyone can react properly.

Europe is where the pressure sits

The ILZSG flagged it plainly: European smelters are running against headwinds. Energy costs are still elevated—they never really came down after 2022, did they?—and concentrate availability has tightened. Producers across the continent are sitting below full capacity because the treatment charges don't justify running harder when power costs what they cost.

Boliden's Odda expansion in Norway is meant to help. It matters. But actually, that's not quite right—it matters, but only partially. Odda adds tonnage, yes, but the real problem isn't a shortage of capacity overall. It's that capacity sits in the wrong places. Chinese smelters have concentrate flowing in. European smelters often can't access the same feedstock at the same economics, even when global mine supply is adequate.

The logistics are messy.

They don't resolve themselves quickly either. Mine output will grow in 2026, but where it's mined and where it can be smelted are two different conversations. Concentrate from Australia or Peru doesn't move to Bulgaria on sentiment.

So the 19,000-tonne deficit is more or less a central estimate with a genuinely wide range around it. If European producers manage closer to full capacity and Odda performs as intended, the deficit gets smaller or disappears. If we see another energy spike heading into winter or a major producer outside China flags problems, you're looking at 80,000 tonnes of deficit or more before the market adjusts price.

The demand side is straightforward enough. Zinc goes into galvanizing. Galvanizing follows construction and vehicles. A 1.3 per cent demand lift reflects modest global growth, not a boom. Asia is steady. Europe is still subdued. There's no shock incoming. Which means the only real story is whether smelters can keep the lights on and the furnaces running.

A 19,000-tonne gap on 14 million tonnes is balance. But balance isn't comfort, and comfort isn't where the margin sits.

Tags: ILZSG, Boliden, zinc ingot supply, zinc market deficit 2026, European smelter energy costs, refined zinc demand forecast