The International Lead and Zinc Study Group forecasts an 88,000-tonne refined zinc deficit in 2026, followed by a 25,000-tonne surplus in 2027. Its original 19 October 2026 release expects demand to keep growing in both years. The projected move into surplus relies on supply growing faster. ILZSG, pp. 3–4.
Investors have a specific proposition to test. Additional output could improve the forecast balance without a collapse in demand. The task is to establish whether the expected material is being produced, processed and delivered on schedule.
Follow concentrate before celebrating refined metal
ILZSG projects zinc mine output of 12.40 million tonnes in 2026, down 2.6%, then 12.78 million tonnes in 2027, up 3%. It expects improved concentrate availability to support refining next year, after limited feed and energy costs constrained production outside China in 2026. Supply assessment, pp. 3–4.
A mine's output and a refiner's metal production are separate stages. A supply forecast needs enough suitable feed to reach operating plants, and those plants need to process it economically. More stated refining capacity would be insufficient if the expected concentrate failed to arrive.
The same distinction matters to investment returns. A producer with saleable concentrate could face different commercial conditions from a smelter competing to obtain it. A forecast for the final metal balance cannot determine the margin earned at each stage of the chain. Treatment terms, energy expenditure and reliability still require their own assessment.
The constructive supply case is that the expected mine recovery occurs and refiners can turn it into additional metal. That could ease shortages without a contraction in customer activity. The risk is a delay that leaves the market relying on inventory or a more expensive source of supply for longer than expected.
The projected surplus is small
Against forecast 2027 usage of 14.19 million tonnes, a 25,000-tonne surplus represents approximately 0.18% of annual usage. That is desk arithmetic using ILZSG's published balance and demand figure. Its rounded supply and demand totals should not be used to replace the separately published balance. Forecast figures.
The size warrants some humility. A delay to supply or a change in consumption could alter the outcome. The percentage does not establish the probability of such an event, and it should not be presented as a statistical error band. It simply shows how little separates the forecast totals.
Nor is an annual surplus a quantity already sitting in an exchange warehouse. Inventory availability, location and delivery timing can affect customers even when the full-year arithmetic looks balanced. An investment thesis needs current evidence on those conditions before asserting that physical tightness has ended.
Several supply improvements could accumulate into a meaningful change. A narrow first surplus can precede a looser market if new production continues to arrive. Dismissing it because the initial number is small would be as complacent as treating it as guaranteed abundance.
The useful response is to monitor the assumptions: mine output, concentrate availability, refinery performance and demand. A series of successful deliveries would strengthen the surplus case. Repeated delays or stronger consumption would weaken it. There is no need to attach a price target before that evidence appears.
For zinc miners, costs and financing remain central whichever forecast wins. A competitive operation may earn through a modest surplus, while an expensive one can struggle during an apparent deficit. The latest outlook provides a reason to investigate supply delivery closely; it does not rank the businesses or settle their valuations.