When you buy through affiliate links in our content, we may earn a commission at no extra cost to you. Learn In the first five months of 2024, the price of zinc — primarily used to protect steel from corrosion — showed a potential reversal of the downtrend that has persisted since 2022.
In the third week of May, zinc prices surged to a 15-month high, surpassing $3,100 per ton, following China’s announcement of a series of new stimulus measures aimed at revitalizing its struggling property sector.
The debt crisis plaguing the country’s property sector has significantly impacted demand for crucial construction metals, with steel being the primary source of zinc demand.
But will these new stimulus measures be sufficient to bolster demand for zinc? Let’s delve into expert insights for the latest zinc price forecast.
Key Takeaways
- Idle smelters could resume production as energy prices ease and zinc prices continue rebounding.
- Mine production is recovering, but growth is limited, raising concerns about concentrate supply for smelters.
- Demand growth is insufficient to absorb zinc output, leading to an oversupply expected in the coming years
- Zinc reached an all-time high of $4,603 per ton in November 2006.
Zinc Price Forecast Summary
2024
$2,478 to $3,165.91
Key factors:
- Rebounding output
- Modest growth in demand
- China’s new plan to rescue property sector
2025
$2,400 to $2,775
Key factors:
- Persistent oversupply
- Decelerating growth in steel demand
2026-2033
2026: $2,300 to $2,626
2027: $2,400 to $2,675
2028:$ 2,400 to $2,688
2029:$1,800 to $2,748
2030 to 2033: $1,750
Key factors:
- China is moving into green technologies that require critical minerals
- Persistent oversupply
Zinc Price 2020-2023: China’s Soft Demand Cap Gain
Like other industrial metals or base metals, the zinc price story has been dominated by China. The country’s robust stimulus to boost its economy helped the metal used for coating steel to survive 2020-2021. This time was marked by mine closures and poor demand induced by the first wave of the COVID-19 outbreak in 2020.
Zinc prices gained 21% in 2020 despite dropping to below $2,000 per ton in March 2020 in the wake of the pandemic. In 2021, zinc prices gained an additional 28% as surging electricity prices in Europe forced smelters to cut output or put their facilities on maintenance to minimize losses.
Russia’s invasion of Ukraine in late February 2022 worsened the energy crisis in Europe. Following the invasion, Russia halted its gas supply to the continent, leaving buyers scrambling for alternative sources. The energy supply uncertainties pushed zinc prices to more than $4,000/ton.
However, the price began to give up its gains, dropping to below $3,000 by the end of Q1, 2022. The second COVID-19 outbreak that swept through China in late February raised concerns about demand from the world’s largest consumer of industrial metals.
Pessimism regarding China’s consumption and central banks’ monetary tightening further dragged prices down even though many European smelters were still closed. Over 2022, zinc prices dropped nearly 16%.
Entering 2023, optimism surrounding China’s demand supported zinc prices after the country fully lifted its strict COVID-19 travel restrictions in late 2022.
In the first quarter of 2023, the zinc price briefly rallied to reach its highest point for the year at $3,485/ton in late January. However, the rally quickly evaporated as China’s economic recovery continued to underperform, and the debt crisis in the country’s property sector worsened, dragging down demand for construction metals.
For the remainder of the year, China’s economy continued to put downward pressure on the price of zinc and other metals. More shut-downs of zinc mines due to the low price did little to shore up the price, offset by subdued demand. Zinc dropped a further 10% in 2023.
Key Drivers to Zinc Price Forecasts
At the time of writing, zinc was trading at around $2,993.5 per ton, off from its peak price this year of $3,143/ton, reached in the third week of May. However, the blueish-shiny metal has gained more than 12% so far this year.
Concentrate deficit, as mine closures have reduced ore production, combined with the speculative side, has boosted the zinc price for the first five months of this year.
Can it maintain its uptrend for the remainder of the year? We are examining factors influencing the zinc price forecast for this year, 2025, and beyond.
Oversupply to Persist
In April, Australia’s Office of Chief Economist anticipated a steady 1.4% annual growth in global refined zinc production from 2024 to 2029, primarily driven by China’s expanding capacity. By volume, OCE predicted a rise from 13,863k tons (kt) in 2023 to 13,960kt in 2024, with a trajectory reaching 15,111kt by 2029.
BMI, a country and industry risk research company that is part of Fitch Solutions, projects a 2.8% increase in global zinc output to 14,570kt in 2024, a slower pace compared to the 6.3% growth observed in 2023.
China is expected to maintain its leading role, contributing 49% to global production, with the refined zinc output forecasted to climb by 4.5% to 7,232.42kt in 2024.
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Moreover, the restart of Glencore’s Nordenham smelter and the expansion of Boliden’s Odda smelter are poised to boost global zinc production further.
The commodity trading giant Glencore suspended Nordenham in the second half of 2022 due to surging European power prices. Reuters reported on May 3rd that Glencore restarted Germany’s 165,000-ton-per-year zinc smelter in February this year.
Glencore has set zinc output guidance at between 900 to 950kt for 2024, compared to actual production of 919 kilo tons (kt) in 2023, according to its 2023 annual report.
Swedish zinc producer Boliden plans to expand the capacity of its Odda zinc smelter in Norway to 350kt per year from the current 200kt.
On the other hand, limited mine production may pose a tailwind for refined zinc production. In 2023, the market experienced supply disruption as miners temporarily suspended their mines after the zinc price collapsed to below $2,000 in the wake of COVID-19 pandemic in March 2020.
In April, the International Lead and Zinc Study Group (ILZSG) estimated that global zinc mine output could increase by only 0.7% in 2024 to 12.42 million tons, following 2.3% and 1.2% declines in 2022 and 2023, respectively. With the limited availability of concentrates, the Lisbon-based industry group expects global refined zinc metal output to rise by 0.6% to 14.01 million tons in 2024.
Daria Efanova, Head of Research at the London-based brokerage firm Sucden Financial, noted on April 17 that the combination of tightness in concentrate supply and the low zinc price has driven treatment charges to a three-year low, thereby squeezing smelters’ profit margins.
A treatment charge (TC) is a fee paid by miners to smelters for turning their mineral concentrate into refined metals.
Efanova said:
“Obviously that’s something we’ve seen since November 2023, where a lot of closures have taken place due to prices being quite low, but also lack of concentrate and that created a picture of an environment where smelters were not able to create profit margins enough to increase production rate.”
Despite experiencing modest output growth, oversupply is anticipated to persist due to ongoing demand lag.
BMI projects annual surplus will widen to 227kt in 2024 from 196kt in 2023. Meanwhile, the International Lead and Zinc Study Group forecasts a smaller surplus of 56kt.
Demand Continues Rebound, but Growth Subdued
Global consumption of refined zinc metal is expected to maintain its upward trajectory in 2024, following a rebound observed in 2023. However, the persistent weakness in global economic growth and uncertainty surrounding China’s economic recovery are poised to dampen zinc demand growth.
Zinc is predominantly used by the steel industry for anti-corrosion coating purposes. However, the steel sector—like other industrial metals—has been adversely affected by subdued demand from the construction and industrial sectors due to the sluggish global economy and muted demand from China, the world’s largest steel consumer and producer.
China has been grappling with reviving its property sector, which has been mired in mounting debts, resulting in liquidation orders for some Chinese real estate companies. The property sector accounts for up to 30% of China’s GDP and 30% of the country’s total steel consumption, according to S&P Global.
Additionally, central banks’ monetary tightening increased borrowing costs for the purchase of residential homes and limited the expansion of manufacturing capacity last year. According to the World Steel Association (WSA), steel demand fell by 1.1% in 2023 to 1.76 million tons.
BMI forecasts global consumption to grow by 2.6% in 2024, driven by an expected increase in China’s demand growth. However, this year’s zinc demand growth is slowing from 3.4% in 2023, although it is still rebounding from -3.9% in 2022.
In 2024, China’s zinc demand is anticipated to rise by 1.8%, marking a slowdown from the 8.1% growth in 2023 and the 4.5% contraction in 2022. The increase in demand is in line with the recovery observed in China’s production of galvanized steel plates in 2023, following a decline in 2022, according to BMI.
BMI said:
“The rebound in global zinc demand would be even stronger were it not for a disappointing growth outlook in China’s property sector. Over the longer term, we maintain our outlook for global refined zinc demand growth to decelerate over the coming years due to slowing global steel production growth. Weaker global demand growth will create persistent annual production surpluses over the remainder of the decade.”
Elsewhere, BMI anticipated India to be a bright spot for global steel production and demand growth, owing to multiple infrastructure plans, including rail and roads, to spur the country’s economic growth. It added that zinc demand from Europe is expected to recover after a notable decline in the annual demand due to a weaker construction section.
WSA predicted in April that global steel consumption would rebound by 1.7% to 1.79 million tons in 2024 and by 1.2% to 1.8 million tons in 2025.
China’s New Property Stimulus
China’s struggling property sector has put downward pressure on demand for industrial metals, from copper, aluminum, and nickel to steel. Investors are closely watching whether new measures announced in mid-May can revive the country’s property sector.
On May 17th, the Chinese Government announced a series of new measures to bolster its real estate sector. These measures include encouraging local state-owned companies to purchase homes that have completed construction utilizing a 300 billion yuan re-lending facility allocated by the People’s Bank of China (PBOC).
State news agency Xinhua reported that the minimum down payment ratio for first-home purchases has been cut to 15% and to 25% for second-home purchases. PBOC also cuts the loan rates for individual housing provident funds by 0.25 percentage points. In addition, PBOC cancels the floor level of commercial mortgage rates for first and second homes nationwide.
ANZ Research’s Senior Commodity Strategists Daniel Hynes and Soni Kumari wrote in a note on May 23rd that China’s fresh property stimulus is sufficient to stabilize the sector. Still, it is unlikely to boost demand for iron ore and steel – zinc’s primary source of demand.
Hynes and Kumari said:
“These measures should support a rebound in construction activity in the property sector from the current lows. But they will do little to stimulate new projects, the real drivers of steel/iron ore demand.”
ANZ Research forecasts that China’s property sector’s steel consumption will fall by 4% to 270mt in 2024.
“Nevertheless, we expect this package to provide some support to steel and iron ore prices. This will be aided by improving steel mill margins, relatively low steel inventories and rising demand from non-property sectors.”
Despite the decline in the property sector, China’s steel industry has shown resilience, supported by growth in the infrastructure and manufacturing sectors. According to ANZ Research, infrastructure, and automotive industries collectively account for approximately 25% and 10% of China’s overall steel consumption.
Henry Hao, Principal Economist at business intelligence firm CRU, said on May 24:
“China has been intentionally investing in infrastructure projects to offset the downturn in the property sector, and that’s why the demand for construction materials did not fall as much as the declines in construction activities in the real estate sector. And in the long term, China will still need commodities for its best industrial base and ongoing urbanization.”
Hao added that China will remain a significant commodity player despite the country’s insatiable demand. However, he said the focus has shifted to the so-called ‘New Productive’ forces, such as low-carbon technologies.
“For example, the push for low carbon technologies could see a rise in demand for copper, rare earth, lithium, and other battery materials,” Hao said.
Zinc Price Forecast 2024
| Analyst/Source | Zinc price 2024 (f) | Price 2023 (e) |
| ANZ Research | $2,478 | $2,661 |
| Australia’s OCE | $2,593 | $2,716 |
| BMI | $2,500 | $2,651 |
| Fitch Ratings | $2,500 | $2,643 |
| ING | $2,670 | |
| The World Bank | $2,500 | $2,653 |
| Trading Economics | Q2: $3,039.35
Q3: $3,101.88 Q4: $3,165.91 |
For the zinc price forecast 2024, most analysts expected the metal’s price to fall as the subdued global economy will still put pressure on demand amid an anticipated rebound in output, leading to a market surplus.
ANZ Research anticipated the zinc price dropping to $2,478/ton in 2024 from $2,661 in 2023, while Australia’s Office of Chief Economist predicted the metal would average $2,593/ton, down from $2,716/ton the year before.
BMI, Fitch Ratings, and the World Bank estimated the zinc price to trade at $2,500 per ton in 2024, less than the 2023 average of over $2,600 per ton.
According to the World Bank in its Commodity Market Outlook 2024:
“Subdued industrial activity in China and other major economies is envisaged to weigh on demand for zinc, which is mainly used to galvanize steel for construction, manufacturing, and infrastructure.”
Daria Efanova, Head of Research at London-based brokerage Sucden Financial, said in a webinar on April 17 that the zinc price was expected to remain at current levels with a slight upside as historically low prices may discourage the reopening of smelters.
“We are still likely to see some choppy trading in the meantime, some volatility on the upside and downside.”
In contrast, economic data provider Trading Economics forecasted the zinc price to rise over 2024, from $3,039.35/ton in Q2 to $3,165.91 in Q4.
Zinc Price Forecast 2025
| Analyst/Source | Zinc Price Forecast 2025 |
| ANZ Research | $2,568 |
| Australia’s OCE | $2,597 |
| BMI | $2,650 |
| Fitch Ratings | $2,400 |
| ING | $2,775 |
| The World Bank | $2,600 |
| Trading Economics | Q1: $3,237.98 |
The zinc price predictions for 2025 were diverse.
ANZ Research, BMI, Dutch bank ING, the World Bank, and Trading Economics anticipated the zinc price to rise in 2025.
ANZ Research forecasted the metal’s price to trade at $2,568/ton, up from $2,500 in 2023. BMI predicted that the price of zinc would average $2,650 in 2024 from $2,500/ton in the previous year.
The zinc price is expected to average $2,600/ton next year, up from an estimated $2,500 in 2024, according to the World Bank’s zinc price forecast 2025.
The Bank said:
“In 2025, improving global growth is expected to underpin a moderate 4 percent pickup in prices, even with ample supplies.”
As of May 23, ING forecasted the zinc price to reach $2,775 per ton in 2025, up from the anticipated $2,670 for 2024. In its zinc price forecast as of June 1, Trading Economics also anticipated the metal to increase to $3,237.98 in the first quarter of 2025, up from $3,165.91 per ton in the last quarter of 2024.
However, OCE predicted that the zinc price would remain marginally unchanged at $2,597 per ton in 2025 compared to the estimated $2,593 per ton in 2024, as global industrial production and construction were expected to pick up.
Zinc Price Forecast 2026-2033
| Zinc Price Forecast | BMI | Fitch Ratings | ING | Australia’s OCE |
| 2026 | $2,600 | $2,300 | $2,590 | $2,626 |
| 2027 | $2,650 | $2,400 | $2,675 | |
| 2028 | $2,400 | $2,688 | ||
| 2029 | $1,800 | $2,748 | ||
| 2030 | $1,750 | |||
| 2031 | $1,750 | |||
| 2032 | $1,750 | |||
| 2033 | $1,750 |
Longer-term zinc price forecasts for 2030 and beyond suggested increased diversity and volatility.
Fitch Ratings has revised up the price of zinc in 2026 to $2,300 from previous estimates of $2,200, but the revised projection was lower than the $2,400 forecasted for 2025.
“Our increased medium-term and mid-cycle assumptions for zinc reflect the expectation that demand will gradually recover, supported by incremental growth in China, despite short-term challenges,” according to Fitch Ratings.
ING also expected the zinc price to fall to $2,590 in 2026 from $2,775 in the year earlier.
OCE’s latest long-term forecast on the zinc price was also upbeat. It projected the price of zinc to trade higher at an average of $2,626/ton in 2026 from 2025. OCE anticipated the zinc price to continue climbing to $2,675/ton in 2027, $2,688 in 2028, and $2,748 in 2029 due to improving industrial and construction demand.
In contrast, BMI had a bearish long-term outlook for the zinc price.
The annual oversupply of zinc was expected to persist over the coming years, with the surplus peaking at 805kt in 2027. This would lead to a downtrend in the metal’s price from 2026 to 2033, according to BMI’s zinc price predictions.
The zinc price was anticipated to fall to $2,600 in 2026, followed by a modest rebound to $2,650 in 2027, before dropping to $2,400 in 2028 and declining further to $1,800 in 2029.
From 2030 to 2033, the zinc price was expected to stabilize at $1,750.
According to BMI:
“While subsequent surpluses will be smaller, the market will remain well-supplied. A slowdown in China’s galvanized steel production growth will weaken the average rate of global refined zinc demand to 0.6% between 2028 and 2033.”
The Bottom Line
The zinc price is expected to experience a modest rebound in 2024 and 2025 before resuming its downtrend from 2026 onwards. This downtrend is projected to persist as oversupply lingers for years to come, with demand unlikely to grow sufficiently to absorb the increase in output.
The key to the zinc price recovery still rests on the demand from the steel industry, whose output growth is expected to slow in the coming years.
Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the commodity market, the spread of your portfolio, and how comfortable you feel about losing money.
The information in this article does not constitute investment advice and is meant for informational purposes only.
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References
- Resources and Energy Quarterly March 2024 (Industry.gov)
- Glencore Annual Report 2023 (Glencore)
- High-flying zinc shrugs off European smelter restarts (Reuters)
- Glencore 2023 Production Report (Glencore)
- Boliden Odda (Boliden)
- International Lead and Zinc Study Group (Linkedin)
- Zinc benchmark TCs settled at $165/t; down nearly 40% y-o-y on continued tight supply (Fastmarkets)
- Tepid domestic demand, robust exports to tint China’s steel sector in 2024 (Spglobal)
- Table 1. Steel Demand Forecasts SRO April 2024, finished steel products (Worldsteel)
- China to set up 300-bln-yuan relending facility for government-subsidized housing (English.news)
- China abolishes mortgage floor rates, cuts minimum down payment ratios to boost property market (English.news)
- China’s Changing Role in Global Commodity Market (Fitchratings)
- Fitch Ratings Raises Several Global Metals and Mining Price Assumptions (Fitchratings)
- World Bank Commodity Price Forecasts (Thedocs.worldbank)
- Commodity…zinc Forecast 2024/2025 (Tradingeconomics)
- Our global economic and financial forecasts (Think.ing)
