LME Zinc Market Faces Severe Tightness as Cash-3M Spread Surges to over 320 USD/t

Published: Oct 22, 2025 00:04

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On October 21st, the LME zinc market experienced an exceptional physical squeeze, with the cash-to-three-month spread (Cash–3M) widening beyond $320 per ton—the highest level since 1997. According to LME data, total zinc inventories have fallen to 37,000 tons, including 13,000 tons of cancelled warrants, leaving only about 24,000 tons available for delivery, less than one day of global consumption. Meanwhile, six institutions reportedly hold nearby long positions equivalent to roughly 300% of available stocks, intensifying short-covering pressure and exposing short holders without physical delivery capacity to significant losses. SMM will continue to monitor market developments and the potential impact of Chinese zinc exports on supply relief.

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