Raw Material Prices
CRU: Zinc premium remains elevated on future supply concerns
Written by Olga Hepting
May 30, 2025
CRU assessed that the US Midwest delivered premium decreased to 18.5¢/lb in May, down 0.5¢/lb from April.
Downward pressure on the US premium persisted due to weakness in key consuming sectors, while refined supply held steady. Some zinc consumers reported that zinc demand in April and May was 5% to 15% lower than in the same months last year. Zinc supply concerns have been largely alleviated for the time being, given zinc’s special status as a critical mineral and its zero tariff rate.
However, the premium did not fall further, as might have been expected in this situation. This was due to supply concerns linked to the ongoing investigation of zinc under Section 232, aimed at determining whether high import dependency could pose a threat to national security and whether domestic production needs to be strengthened through new trade barriers.
Some suppliers chose to hold on to material rather than offer it to the market, anticipating higher premiums should the Section 232 investigation lead to new trade barriers for refined zinc. We do not expect this outcome. While the US is highly dependent on refined zinc imports (about 75% of domestic refined consumption), most imports come from Mexico and Canada, which are currently within the USMCA trade agreement. The remaining required material—on average, between 100,000 and 300,000 metric tons per annum—can be sourced from a wide range of countries, reducing geopolitical risks to supply.
Tariffs on refined zinc would hurt the very sectors they aim to protect, such as automotive and steel, while offering limited benefits to national security. On the demand side, zinc’s role in critical military or technological applications is minimal.
This article was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com.
Olga Hepting
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