The $800 Miss: Why Zinc Forecasts Failed

By Siam Sukkhee Trading Co., Ltd — 2026-10-17 — Bing News — zinc price LME

Zinc hit $3,781 per tonne on 8 October. Weeks earlier it had touched $4,186.

Anyone holding the old consensus forecast of $2,800–3,200/t had missed the move by something like $800 a tonne. Not useful, as forecasts go.

The climb wasn't new. Zinc had bottomed near $2,521/t in April 2025 and run more than 50% at its peak. But the harder question sits underneath: did the fundamentals actually shift, or did we just price in sentiment?

That matters if you're thinking about timing.

The forecast aged in months, not years

Start with why the old range looked solid at the time. In 2024, zinc traded between roughly $2,621 and $2,979 per tonne — a tidy 13% gain year on year that most people traced to raw material tightening. Fair enough.

Then 2025 opened with a slide. Price fell to $2,521 in April, then recovered to a December high around $3,350. The full-year average sat right at $2,870 per tonne. Inside the consensus band. The forecast looked sound.

Then 2026 arrived and blew past it entirely. Early gains topped 25%. The price reached $4,186 in September. Even after pulling back to the $3,700–3,800 band by October, it had left the old consensus far behind.

What this tells you is that a published range is a snapshot of when someone wrote it, not an anchor for where the price should be. Your entry level matters as much as the direction you expect. A move from $2,521 to $4,186 and back to $3,700 shows how quickly a well-timed entry can turn into a badly timed one.

The real signal isn't the headline price

The clearest sign of zinc tightness isn't a price at all. It's a fee, and that fee has collapsed.

Here's how it works. Miners don't sell pure zinc — they sell concentrate, crushed and processed ore with higher zinc content, to smelters that refine it. Treatment and refining charges, or TC/RC, are what the smelter earns for that processing. When ore is plentiful, smelters demand high fees. When ore is scarce, they compete for limited supply and accept lower fees. Power shifts to the miners.

That's exactly what happened.

The annual benchmark treatment charge fell to $80 per tonne for 2025 shipments and has held near that level into 2026. They've stayed historically low despite a partial recovery.

You're paying for ore you'd usually charge to treat.

Treatment charges work as an early alarm. They move before the refined market price catches up.

The deficit is there, but it's thin

The refined metal balance offers a more measured picture. Twelve months ago, the International Lead and Zinc Study Group expected oversupply — 85,000 tonnes of surplus for 2025 and a hulking 271,000 tonnes for 2026. Those numbers didn't survive the next data round.

The ILZSG's framework relies on reported mine and smelter data revised often, which helps explain why a projected 271,000 tonne surplus could flip to a slight deficit in months.

The 2025 shortfall followed a 69,000 tonne deficit in 2024. For 2026, the ILZSG projects refined demand rising 1.3% to 14.00 million tonnes against refined output up 1.4% to 13.99 million tonnes. The gap is less than 0.2% of the market.

The revision is real. The resulting deficit is thin.

A 19,000 tonne hole is small enough that one mine ramping faster, or demand slipping slightly, could close it or flip it. Read it as a lean toward tightness, not a certainty.

One mine holds the answer

Kipushi in the Democratic Republic of Congo is the test case. Debottlenecking work lifted plant capacity 20% to 960,000 tonnes per year.

Then it delivered a record 77,147 tonnes in Q3 2026. On an annualised run rate, that sits around 309,000 tonnes.

But if the ramp-up falters or demand softens, it vanishes. The entire story hinges on one operation tracking to plan.

The mixed signals

LME warehouse stocks edged higher in early October — 123,750 tonnes on 2 October, then 127,750 on 7 October, and 127,425 on 8 October. Rising stocks usually suggest easing supply. But one week is too short to establish a trend, and warrant concentration can hide how much inventory is actually available.

The futures curve tells a different story. Around 8 October, cash zinc traded about $58–60 per tonne above the three-month contract — a structure called backwardation. Buyers paying more for immediate delivery than later delivery signals near-term physical tightness.

So warehouse stocks are building. The curve says the market is tight now. One points to loosening supply, the other to scarcity. That contradiction sits at the heart of whether any position is well-timed.

If you're weighing an entry, the signals to watch are straightforward. LME stocks: whether the early-October build extends or reverses. The curve: whether backwardation widens, narrows, or flips. Treatment charges: whether they recover from historically low levels as Kipushi adds concentrate. Mine output and Kipushi guidance: any quarterly upgrade beyond 290,000 tonnes.

The price path itself argues for patience. Staged entry spreads that timing risk in a way a single decision cannot. Match whatever exposure you choose to the volatility you can tolerate.

The consensus was wrong. The deficit is real but fragile. That leaves you not with answers but with signals — and the sense that whoever prices zinc next will get it wrong too.

Source: "Zinc futures traded above $3,700 per tonne, recovering from a more than six-week low amid persistent supply tightness." — Trading Economics

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