# China flipped to zinc net exporter in 2026 as domestic mine output fell and smelters ran for export margins; LME touched $3,608/t in June
> China's Q1 net zinc exports ~30,000t reversed 209,767t net imports in full-year 2025; ILZSG forecast a 19,000t global deficit; Korea Zinc's Tennessee recycling plant and a wave of Western mine curtailments frame the supply debate

**Meta:** type: story · date: 2026-06-23 · heads: The Quiet Shift, Whose Money · 10 takes · 4 lenses · 7 regions

## Summary

China became a net exporter of refined [Zinc](/en/entity/zinc) in Q1 2026, shipping approximately 30,000 tonnes more than it imported over the three months, a sharp reversal from 209,767 tonnes of net imports in full-year 2025. The shift reflects a structural decline in Chinese zinc mine output, down approximately 7% year on year in Q1 2026 as legacy deposits in Hunan, Yunnan and Inner Mongolia experienced grade depletion, reducing the concentrate feed available to Chinese smelters and prompting them to export refined zinc where global prices offered margin. The International Lead and Zinc Study Group reported a 19,000-tonne global deficit in the first two months of 2026, against a 46,000-tonne surplus in the same period of 2025. LME zinc cash settled at $3,608.50 per tonne on June 23, near its year-to-date high. Korea Zinc commissioned a Tennessee facility in February 2026 to recycle electric arc furnace dust into approximately 30,000 tpa of zinc-equivalent product, using IRA Section 45X credits. CRU Group projects a full-year 2026 global deficit of 150,000-200,000 tonnes if Chinese smelter export behaviour and Western mine curtailments persist.

## The split

The deficit camp (CRU, Fastmarkets) argues that China's mine-output decline is structural, not cyclical: the Hunan and Yunnan deposits that built China's zinc industry are past peak grade, and no major Chinese greenfield mine is in the development pipeline. The corollary is that Chinese smelters will increasingly compete for imported concentrate, tightening TC/RC terms for Western miners in the same pattern that copper saw in 2024-2025. The more cautious view (ILZSG, S&P Global) notes that Western mine curtailments from the 2023-2024 price downturn are partially reversible: Nyrstar's idled Budel smelter, Boliden's Kokkola, and Century mine's potential restart could add supply faster than the deficit models assume. The Korea Zinc Tennessee investment is the first major Western zinc recycling plant under the IRA framework, but EAF dust recovery is volume-constrained by the quantity of steel scrap processed, and 30,000 tpa does not move the global balance materially.

## By the numbers

- ~30,000t, China's net zinc exports in Q1 2026 (first quarterly net-export position in years).
- 209,767t, China's net zinc imports in full-year 2025.
- 19,000t, ILZSG-estimated global refined zinc deficit in January-February 2026.
- 46,000t, global zinc surplus in January-February 2025.
- ~7%, year-on-year decline in Chinese zinc mine production in Q1 2026.
- $3,608.50/t, LME zinc cash price on June 23, 2026.
- 100,000t, Korea Zinc Tennessee annual EAF dust processing capacity (recovers ~30,000t zinc equivalent).
- 150,000-200,000t, CRU's projected full-year 2026 global zinc deficit.

## Why it matters

[Zinc](/en/entity/zinc) is the fourth-most-used metal globally, primarily for galvanizing steel against corrosion. It lacks the direct battery-chain narrative of lithium or cobalt, but as a critical input to construction, automotive and infrastructure steel, a structural zinc deficit has broad industrial cost implications. China's shift from net importer to net exporter of refined zinc is a market-structure inversion that reverses the flow of refined metal from East-to-West and tightens European smelter feedstock access, a pattern now visible across multiple base metals (copper TC/RC collapse, nickel surplus-to-deficit swings). The Korea Zinc Tennessee plant establishes the template for urban mining of zinc from the domestic steel-recycling waste stream under IRA incentives, a model that could partially decouple Western zinc supply from Chinese mine output over a 5-10 year horizon. But the near-term balance is driven by Chinese mine depletion and smelter export behaviour, neither of which Western policy can directly influence.

## What to watch

- Chinese zinc mine output in H2 2026: whether Q1's 7% decline is sustained or partially offset by new Chinese mine openings.
- ILZSG monthly deficit/surplus data: whether the Q1 deficit widens through the year or narrows as Western smelters add back idled capacity.
- TC/RC terms for H2 2026 zinc concentrate contracts: if Chinese smelters compete aggressively for imported concentrate, TC/RCs will compress further, mirroring copper's trajectory.
- Korea Zinc Tennessee scale-up: whether the EAF dust model expands to additional US sites as IRA credits make secondary zinc competitive.
- LME zinc inventory levels and forward curve: a sustained backwardation would confirm the market is pricing the deficit thesis.

## Regional takes (batched by bias / lens)

### unlabelled
- **International Lead and Zinc Study Group (ILZSG)** (Portugal / Global, en) — ILZSG's April 2026 statistical release reports that the refined zinc market recorded a global deficit of 19,000 tonnes in the first two months of 2026, compared with a surplus of 46,000 tonnes in the same period of 2025; global mine output fell 3.4% year on year while refined output rose 1.3%, tightening the concentrate supply available to smelters. Chinese smelters reduced domestic concentrate consumption and increased refined zinc exports as domestic mine output fell below domestic demand for the first time in recent history.
  Source: https://www.ilzsg.org/static/press_release.aspx?from=1&q=2026-04-zinc-market-statistics
- **Chinese Customs General Administration (via Reuters/S&P Global)** (China, en) — Official Chinese customs data for Q1 2026 showing zinc exports of approximately 120,000 tonnes against imports of approximately 90,000 tonnes, producing a net export balance of roughly 30,000 tonnes, the first quarterly net-export position since at least 2022. Domestic Chinese zinc mine production in Q1 2026 fell approximately 7% year on year, attributed to grade depletion at legacy mines in Hunan, Yunnan and Inner Mongolia.
  Source: https://www.customs.gov.cn/customs/302249/302266/302267/5994831/index.html
- **Korea Zinc (Press Release ,  Tennessee Recycling Plant)** (South Korea, en) — Korea Zinc confirmed commissioning of a secondary zinc recycling facility in Tennessee processing electric arc furnace (EAF) dust ,  the zinc-rich waste stream from steel recycling ,  into zinc oxide and zinc metal. The plant processes approximately 100,000 tonnes of EAF dust annually, recovering roughly 30,000 tonnes of zinc-equivalent product. Korea Zinc frames the investment as part of a US critical minerals supply-chain strategy, with the Tennessee plant qualifying for IRA Section 45X advanced manufacturing production credits as a domestic recycling operation.
  Source: https://www.koreazinc.co.kr/en/investors/news/2026/02/tennessee-secondary-zinc-recycling-facility-commissioning.html
- **S&P Global Commodity Insights** (United States, en) — 
  Source: https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/062326-zinc-prices-lme-deficit-china-exports-2026
- **Nyrstar (Q1 2026 Operations Update)** (Belgium / Global, en) — 
  Source: https://www.nyrstar.com/media-centre/press-releases/nyrstar-q1-2026-operations-update
- **Wood Mackenzie (Zinc Market Briefing Q2 2026)** (United Kingdom, en) — 
  Source: https://www.woodmac.com/market-insights/topics/zinc-market-briefing-q2-2026/
- **Reuters (LME zinc price tracking)** (United Kingdom, en) — 
  Source: https://www.reuters.com/markets/commodities/zinc-prices-lme-june-2026/

### commodity pricing
- **Fastmarkets** (United Kingdom, en) — Records LME zinc cash settling at $3,608.50 per tonne on June 23, 2026, near the year-to-date high, driven by the combination of the ILZSG deficit data, declining Chinese zinc mine output, and a draw-down in LME warehouse inventories to below 150,000 tonnes. Notes that the China-to-West zinc flow reversal is tightening ex-China concentrate availability for European smelters (Nyrstar, Glencore) which had previously relied on Chinese refined zinc imports to balance domestic shortfalls.
  > "LME zinc touched $3,608.50/t on June 23, 2026, as the ILZSG deficit, Chinese mine output decline and low LME inventories combined."
  Source: https://www.fastmarkets.com/insights/zinc-lme-prices-june-2026-market-analysis/

### mining trade / critical minerals
- **Mining.com** (Canada, en) — Reports on the structural decline in Chinese zinc mine output, noting that Hunan and Yunnan province operations are experiencing grade depletion after decades of intensive extraction; estimates Chinese domestic zinc mine production will fall 5-8% in 2026, reducing the concentrate feed available to Chinese smelters and prompting smelters to substitute with imported concentrate, while simultaneously exporting refined zinc where margins allow. Notes that the global zinc mining pipeline outside China is thin: Century mine in Australia (Develop Global) is in reclamation, and Vedanta's Gamsberg Phase 2 in South Africa is the only material new supply in development.
  > "Chinese zinc mine output is declining structurally as Hunan and Yunnan deposits deplete, turning China into a net zinc exporter in 2026 for the first time in years."
  Source: https://www.mining.com/china-zinc-mine-output-decline-net-exporter-2026/

### metals research
- **CRU Group** (United Kingdom, en) — CRU's Q2 2026 zinc market outlook models a global deficit of 150,000-200,000 tonnes for full-year 2026, significantly larger than ILZSG's early-year figure; attributes the discrepancy to different assumptions about Chinese smelter export behaviour and Western mine curtailment reversals. Notes that Western smelters (Nyrstar, Boliden, Glencore Nordenham) have maintained production despite tight concentrate availability, but faces rising feedstock costs as TC/RCs compress.
  > "CRU models a 150,000-200,000 tonne zinc deficit for 2026, more bearish on supply than ILZSG's early estimate."
  Source: https://www.crugroup.com/knowledge-and-insights/insights/2026/zinc-market-outlook-q2-2026-china-smelter-exports/

## Across the graph
- Related: [[copper-tcrc-zero]]
- Entities: Zinc

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