Global: Zinc mine production rises over 5% y-o-y in 2025 but raw material crunch persists

• Mine output rises, led by Peru, steady gains in Australia and India
  
  
• China produces 4.07 mnt but imports surge 30% to 2.57 mnt
  
  
• Smelter tie-ups, trade disruptions, refined deficit highlight concentrate tightness
  
  

Morning Brief: Global zinc mine production increased to 12.59 million tonnes (mnt) in 2025, up 5.4% y-o-y, reflecting improved output across major producing regions. However, this growth has not translated into easing raw material availability, as concentrate markets remain structurally tight amid declining ore grades and uneven mine performance.

China stabilises output, leans on imports

China retained its dominant position with 4.07 mnt of mine production, up 2.8% y-o-y. Despite stable domestic output, the country's reliance on imported concentrates intensified, with imports rising nearly 30% to 2.57 mnt. This shift underscores structural limitations in domestic mining, where grade deterioration and environmental restrictions continue to cap large-scale expansion.

A smelter source noted that import dependence is no longer cyclical but structural, particularly as galvanised steel demand from infrastructure and manufacturing remains firm.

Peru drives growth; Australia steady

Peru emerged as the primary growth driver, with production surging 18.6% y-o-y to 1.51 mnt, supported by operational recovery at key mines. The country continues to act as a critical concentrate supplier to Asian smelters. Australia reported a more modest increase of 2.4% to 1.13 mnt, with consistent output from established assets maintaining its export-oriented supply chain.

India expands; US output contracts

India's zinc mine production rose 2% to 0.87 mnt, supported by integrated operations led by Hindustan Zinc Ltd. The company's output remained broadly stable at 0.98 mnt, as gains at Sindesar Khurd and Rajpura Dariba offset marginal declines at Rampura Agucha. In contrast, US production fell sharply by 11.2% to 0.67 mnt, reflecting operational adjustments and declining ore quality. Kazakhstan also recorded a slight decline, while incremental supply gains emerged from Africa.

Company-level trends highlight operational limits

At the company level, production trends indicate limited upside. Teck Resources' output declined marginally to 0.57 mnt, with Red Dog impacted by mine sequencing. Nexa Resources posted moderate growth of 2% to 0.305 mnt, driven by efficiency gains rather than expansion. MMG and Boliden maintained near-flat output at 0.230 mnt and 0.220 mnt, respectively, reflecting stable operations but limited growth levers.

Vedanta Zinc International outperformed peers, with output rising 4% to 0.260 mnt, supported by Gamsberg ramp-up. In contrast, Glencore's production declined 1.3% to 0.540 mnt, highlighting ongoing adjustments at mature Australian assets. Smaller producers such as Minera San Cristobal and New Century Resources reported largely stable performance.

Recent zinc miningsmelting tie-ups and market developments (last two years):

• Hindustan ZincTripura Group MoU (February 2026): Hindustan Zinc signed an agreement to develop Indias first integrated Zinc Park at Bhilwara, Rajasthan. The company will supply zinc concentrate from its mines, including Rampura Agucha (600,000 t capacity; ~560,000 t production in 2025; ~50 mnt reserves), while Tripura Group will establish downstream manufacturing facilities with a long-term refined product offtake arrangement.
  
  
• Zhuzhou SmelterTeck Red Dog contract termination (2025): Zhuzhou Smelter Group ended its zinc concentrate supply agreement with Teck Resources' Red Dog mine in Alaska, which produces around 450,000 t annually with ~60 mnt reserves. The decision followed rising US-China tariffs, disrupting part of Teck's Asian concentrate sales.
  
  
• Nyrstar US assets sale to Korea Zinc (December 2025): Korea Zinc agreed to acquire Nyrstar's East/Middle Tennessee mining complexes and Clarksville smelter, with completion expected in H1 2026. The acquisition supports a planned $7.4 billion integrated minerals refinery project and strengthens mine-to-smelter supply integration in the US.
  
  
• Red Dog concentrate supply agreement (2025): Teck concluded a deal to supply ~60,000 t of zinc concentrate from Red Dog to a southern China smelter at around $60/t treatment charge (TC).
  
  

Decadal supply-demand dynamics

According to ILZSG data, the zinc market has undergone sharp cyclical shifts between 2016 and 2026. The period from 2016 to 2022 was largely characterised by oversupply, peaking at a surplus of 344,000 t in 2020 amid pandemic-led demand destruction, while smelter output remained steady. Surpluses persisted in 2016 (+122,000 t), 2019 (+10,000 t), 2021 (+95,000 t), and 2022 (+33,000 t), driven by capacity additions, particularly in China.

Deficit phase and tightening fundamentals

The market moved into deficit during 2023-2025, with a shortfall of 148,000 t in 2023 due to declining ore grades at key mines such as Red Dog and curbs on European smelters. Although mine restarts at Tara and Gamsberg eased pressure, deficits narrowed to 69,000 t in 2024 and 33,000 t in 2025. Concentrate tightness persisted, with treatment charges falling to $40-60/t, while exchange inventories declined by 77,000 t to 739,000 t across LME and SHFE.

2026 outlook: Surplus emerges amid weak demand

Global mine production is projected to reach 12.8 mnt in 2026, while refined output is expected to rise to 14.13 mnt. However, demand is forecast to grow by only 1%, resulting in a surplus of approximately 271,000 t. Expansion in Chinese and Norwegian smelting capacity is likely to drive refined output higher, while subdued property sector activity in China may cap consumption growth.