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Informist, Wednesday, Apr. 22, 2026

 

MUMBAI – Despite headwinds to demand, zinc prices are likely to be supported by input cost pressures in the near-term, according to BMI, a Fitch Solutions company. As a result, it has revised its price forecast for the metal to $2,950 per tonne for 2026, up from its earlier forecast of $2,780 per tonne.

 

"For the remainder of 2026, zinc price movements are expected to remain volatile, shaped by persistent supply-side pressures and heightened sensitivity to geopolitical and macroeconomic developments linked to the Middle East," it said in a report Tuesday.

 

The report noted that zinc prices had experienced pronounced volatility in the first quarter of 2026 (Jan-Mar), with early-year gains driven by supply-side concerns. However, the gains were later offset by macro-led uncertainty following the escalation of the US-Iran conflict in late February. In recent weeks, prices have rebounded as the conflict intensified concerns around the availability of key inputs, exacerbating existing pressures on smelters, it noted.

 

"The announcement of a ceasefire in early April briefly eased inflation fears and calmed concerns over the conflict's impact on global economic growth, adding an additional, albeit short-lived, layer of price support before renewed uncertainty over its durability reinforced volatility. We expect risks stemming from the conflict to remain two-sided, with demand-side pressures likely to cap price growth, while conflict-related input disruptions present upside risks," the report said.

 

Sulphur is an important input in agricultural and industrial processes involving zinc, hence Russia's export ban of the chemical since 2025 has curtailed a significant source of global supply. This has been exacerbated by disruptions linked to the escalation of the conflict in West Asia, a key global supplier of sulphur and sulphur feedstocks. More recently, on Apr. 10, authorities in China announced a ban on sulphuric acid exports, underlining the degree of tightness in the market and reinforcing supply-side constraints facing the zinc sector, the report said.

 

"Against this backdrop, concentrate treatment charges remain a focal point for the zinc market, reflecting persistent constraints on refined supply," it said.

 

The BMI report sees demand growth being capped by weakness in China, largely reflecting persistently weak property sector activity, with investment in the real estate sector declining 12.8% on year in 2026. Structural headwinds in the property sector are expected to persist, continuing to weigh on construction-related zinc demand. Nevertheless, modest gains from electric vehicles, renewables and grid investment should provide partial support, with Chinese zinc demand forecast to rise by an estimated 1.2% in 2026, said the report.

  

At 1310 IST, the three-month zinc contract on the London Metal Exchange was dealt at $3,448 a tonne, up 0.2% from the previous close. On the MCX, the April contract traded at INR 364.8 per kg, up nearly 1%. End

 

US$1 = INR 93.85

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Abhijit Doshi

Edited by Tanima Banerjee

 

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