CRU attended Antaike 2026 (17th) Non-Ferrous Metals Market Conference in Hangzhou, Zhejiang province on 16 April 2026 and took the opportunity to discuss the markets with a range of contacts from all sectors. Most discussions focused on the concentrate and sulphuric markets, as most Chinese smelters are gradually facing short concentrate supply and a strong margin of sulphuric by-products.
Our key takeaways on the lead and zinc markets are as follows:
March zinc market balances delayed Kazakh arrivals against tighter concentrate supply
- Kazakh zinc ingot arrivals increased by 12,713 t m/m in March 2026, with most of the gain coming from tail cargoes under 2025 long-term contracts that were delayed by the Lunar New Year and only arrived in March. Much of this material originates from Glencore and continues to move mainly to Turkey, where it effectively sits as hidden stock. While some 0# zinc has already been produced, it has not yet been registered as a deliverable brand, which means it still cannot be used for warehouse delivery.
Sulphuric acid prices remain supported by high sulphur costs and tight supply
- The sulphuric acid market is currently being supported by high sulphur costs, tight plant supply and stronger seasonal demand, but the key price turning point will depend on whether the Middle East conflict eases and spring fertilizer demand starts to fade.
- In China, sulphur-based acid production has already become highly cost-intensive, with sulphur accounting for more than 70% of the production cost by April 2026 and sulphur-based acid producers already facing losses of around RMB800 /t. By contrast, smelter acid remains profitable, with zinc smelter acid margins estimated at around RMB1,963 /t in March 2026, which is keeping utilisation relatively strong. However, acid storage capacity is limited – particularly in Yunnan where tanks can only hold around one to three days of output – so when stocks build up, smelters often have to sell at slightly below market prices.
- Looking ahead, sulphuric acid prices still face downside risk. However, falling costs are likely to be limited by high sulphur prices and autumn fertilizer restocking, with a potential pullback of around RMB200–300 /t from the current RMB1,500–1,700 /t range.
Rising costs and freight rates are expected to tighten zinc concentrate supply further
- Rising oil prices are increasing costs across mines, smelters and shipping, tightening the zinc concentrate market further. Vedanta is already facing expectations of production cuts, and from April, some smelters have begun to feel a tighter concentrate balance. At the same time, freight rates from Southeast Asia are reported to have risen by around RMB20–30 /t, adding further pressure to concentrate supply and transport costs.
Galvanising exports and tower orders continue to underpin zinc demand despite trade headwinds
- Zinc demand remains supported by galvanising exports and tower orders, but the outlook is mixed rather than broadly strong. Export demand to Southeast Asia has continued despite trade restrictions and anti-dumping pressure, as producers have managed to preserve volumes through product adjustments and diversified sales channels.
- Large steelmakers also have broader distribution networks, which helps them offset regional demand weakness caused by geopolitical shocks. Tower orders remain relatively firm as well, with both replacement and new demand supporting activity. With the first and second rounds of State Grid equipment and material tenders now complete, major producers are expected to begin fulfilling new orders from April, and operating rates are likely to remain close to full capacity.
Lead concentrate supply is expected to fall as South32 remains the main source of new output
- Lead concentrate supply is likely to remain tight in the near term. The main incremental supply expectation comes from South32, but growth potential may be constrained by US policy support aimed at preventing the outflow of key metals, including lead and by-product germanium.
- Historically, growth in lead ore supply has often come from zinc by-products, yet this source is now weakening as lead by-product output from zinc mines declines. At the same time, investor appetite for mine development has also cooled, which means concentrate output is likely to soften in the short term.
China’s primary lead supply is expected to stay stronger than overseas, while secondary supply remains around a 1:1 ratio
- China’s primary lead production is expected to remain structurally stronger than overseas over the longer term. This is mainly supported by domestic primary smelters’ stronger capability in recovering precious metals, which should allow them to maintain relatively high supply levels. By contrast, the balance between primary and secondary supply overseas is expected to remain around 5:1, while China’s own secondary lead supply structure is more likely to stabilise closer to 1:1. This suggests that China’s lead supply mix will continue to diverge from overseas markets.
Scrap battery supply is expected to remain tight for the next two to three years
- Scrap battery supply is expected to remain tight over the next two to three years. The main reason is that ICE vehicle replacement demand, which is the principal source of end-of-life battery scrap, remains insufficient to support a meaningful recovery in scrap availability. The impact of China’s lead-acid battery exports will continue to feed through the replacement cycle, but overall scrap circulation is still likely to remain constrained. This will keep scrap battery availability relatively tight in the medium term.
Lead-acid battery producers are operating at around 70% after the Lunar New Year
- Lead-acid battery producers have resumed production steadily after the Lunar New Year, with utilisation rates holding at around 70%. Reports of production cuts remain limited and are not yet clearly supported by broader evidence on scale, timing or specific sites. Dealer stocks are also high, but this has increasingly become a feature typical of the industry rather than a new source of weakness. Overall, downstream operations remain broadly stable, and the impact on the wider market appears limited.
