Zinc "Upside limited...but material surplus unlikely" Major

Research evidence excerpt

Zinc "Upside limited...but material surplus unlikely" Major

Global Research

10 July 2026ab

Zinc Equities

GlobalUpside limited...but material surplus unlikely

Basic Materials

Daniel Major

Zinc is least preferred base metal...but we do not forecast structural surplus Analyst

After a period of supply constraint, mine supply lifted in 2025 and improved concentrate daniel.major@ubs.com

availability allowed TC's to lift from very low levels, supporting smelter restarts and +44-20-7568 3472

growth in refined zinc output. However, the market was not in a material surplus and Myles Allsop

visible inventories remain low. In 2026 China smelter output continued to lift & demand Analyst

remains weak resulting in a well supplied China market vs relatively tight ROW refined myles.allsop@ubs.com

market. The concentrate market has once again tightened and lower TCs/silver/ +44-20-7568 1693

sulphuric prices are likely to see China smelter output fall, eroding elevated inventories. Amy Yi Li

In our view material China zinc imports are unlikely; but exports remains a potential risk/ Analyst

overhang if LME prices lift materially vs current levels capping LME upside. amy-yi.li@ubs.com

+44-20-7568 2064

In our view the fundamental outlook for zinc is less attractive vs copper/aluminium. The George Eadie

demand outlook for zinc remains challenging and we forecast a modest improvement in Analyst

george.eadie@ubs.com

supply will push the market to move into a moderate refined surplus in 2027. After

+1-646-996 4596

relative outperformance YTD and with LME positioning extended; zinc is our least

preferred base metal. However, we see little incentive for miners to allocate large Alex Stansbury, CFA

amounts of capital to new zinc mines and therefore do not expect sustained period of Analyst