Zinc prices are quietly rising - which ASX stocks can benefit the most?

Zinc prices are quietly climbing as the market slowly tightens, creating opportunities on the ASX. Zinc is a core base metal used in galvanising steel for infrastructure and construction, and demand from renewable energy projects and industrial activity remains solid even as broader markets fluctuate. At the same time, supply isn’t expanding quickly; refined zinc inventories, especially in London Metal Exchange warehouses, have been drawn down significantly in recent months, suggesting physical tightness despite forecasts of modest output increases. Lowly visible stocks can support higher prices because traders and producers begin to worry about future availability as inventories shrink.

For ASX investors, this backdrop points to several zinc-linked companies that could benefit if prices continue to rise. Producers or developers with exposure to zinc, whether through primary zinc projects or polymetallic operations, can see improved project economics and stronger margins as zinc lifts. That includes diversified miners with significant base-metal operations, plus junior explorers with zinc resources that might become more valuable as zinc’s outlook improves.

Steel and infrastructure demand, low exchange inventories, supply disruptions and growing interest in zinc’s role in a decarbonising world are helping push zinc prices higher, and ASX stocks with meaningful zinc exposure can benefit from this trend.

Why is zinc getting more expensive?

Source: Tradingview

Zinc’s price action in late 2025 and early 2026 has surprised many investors. After a mid-year slump, LME zinc has climbed back above the US$3,000-a-tonne mark, reflecting tighter conditions in key parts of the global market. Recent gains stem from a mix of supply constraints, inventory dynamics, demand fundamentals, and speculative positioning, all pointing toward upward price pressure.

One of the most important forces behind Zinc’s rise is persistent supply tightness in refined zinc and concentrate markets. Although mined output has grown modestly, the bottleneck occurs at the smelter level, where concentrates are refined into usable zinc metal. Refined production in several regions, including Japan and Kazakhstan, has lagged expectations, leaving the market short of available metal even as raw output increases. Meanwhile, smelter treatment charges and operating rates have fluctuated, signalling that producers are managing costs tightly and sometimes throttling production when economics aren’t favourable.

Another key price driver is inventory depletion in major trading hubs. London Metal Exchange zinc stocks have fallen sharply compared with levels at the start of the year, creating a situation where near-term supply looks thin relative to demand. This scarcity of immediately deliverable metal has contributed to backwardation and what some analysts describe as a “short squeeze” dynamic, in which those betting against prices are forced to buy metal at higher levels to cover positions.

Demand factors also support higher zinc prices. Zinc’s primary industrial use is in galvanising steel, which protects it from corrosion. That makes Zinc essential in construction, infrastructure, automotive and renewable energy sectors. Even if global growth slows in some regions, sustained demand for durable goods and infrastructure projects keeps consumption robust.

Speculative forces have amplified these underlying fundamentals. Traders and funds responding to tight inventories and positive price sentiment often take long positions, adding buying pressure in futures and cash markets. This speculative interest can push spot prices higher because Zinc is less liquid and more sensitive to inventory swings than some other base metals.

Finally, regional supply imbalances, such as strong output in China but limited refined availability in other markets, have created divergent pricing conditions, supporting elevated prices on global exchanges relative to local markets.

Actually, zinc is getting more expensive because supply isn’t keeping pace (especially at the refined level), inventories are low, demand remains steady in key industrial sectors, and market sentiment has turned bullish, creating a perfect recipe for price support.

ASX stocks can benefit the mostfrom the rising zinc price

1. Broken Hill Mines Ltd (ASX: BHM)

Market Capitalisation: $370.80M

Last Price: $1.185

Source: asx.com

Broken Hill Mines Limited is an ASX-listed miner and explorer of silver, zinc and lead with operations rooted in one of Australia’s most legendary mining regions: Broken Hill in New South Wales. This area has been a rich source of base and precious metals for more than a century, and BHM’s modern incarnation brings that history back into active production. The company was created through the consolidation of key assets, most notably the Rasp underground mine and the Pinnacles deposit, giving it both current output and future growth potential.

The Rasp Mine is BHM’s core operating asset. It produces a blend of silver, lead and zinc from high-grade ore delivered to its processing plant, which can handle around 750,000 tonnes per annum. Rasp’s metallurgy includes substantial recoveries for both lead and zinc, and silver credits add meaningful value to the revenue mix.

Alongside production at Rasp, Broken Hill Mines is advancing its Pinnacles project, a shallow, high-grade deposit located about 15 km from Rasp. Recent drilling has delivered exceptional intercepts, with silver and zinc equivalent grades exceeding 1,500 grams per tonne in some holes, highlighting the potential for Pinnacles to become a near-term feed source for BHM’s mill.

The company’s strategy blends current production with resource growth. It is funding expanded exploration and drilling programs to increase the size and quality of its resource base, while also processing ore and selling concentrates to generate cash flow. In 2025, BHM successfully raised approximately A$38.5 million to accelerate drilling and development at Rasp and Pinnacles, a clear sign of investor confidence in its growth pathway.

Broken Hill Mines operates in a mining-friendly jurisdiction with strong infrastructure and established logistics, reducing execution risk relative to greenfield exploration plays. Its portfolio gives it leveraged exposure to rising zinc and silver prices, two commodities underpinned by industrial demand and supply constraints, while also benefiting from lead by-product credits.

Financials

Broken Hill Mines Limited’s financial profile reflects its unique position as both a producer and developer in a growth phase. While still relatively early in its lifecycle, the company has begun to generate meaningful revenue from its Rasp Mine, with around AU$58 million in reported revenue in the most recent 12-month period. This in-the-money production underscores its transition from pure exploration into a cash-producing mining enterprise.

Though revenues are material for a small miner, profitability metrics are mixed. Broken Hill Mines has posted a modest net profit after tax in the low millions. Still, traditional measures like earnings per share remain negative on a trailing-twelve-month basis, a typical pattern for miners balancing reinvestment with early earnings. Average EPS has been in negative territory as the company reinvests cash into drilling and development.

On the balance sheet, BHM has significantly strengthened its position over the past year. Cash and current assets have grown sharply from a few million to around AU$22 million, mainly due to successful equity raises and Rasp's operational cash flow. This financial cushion gives the company the flexibility to fund ongoing drilling, resource expansion, and operational needs without relying heavily on debt.

Debt levels remain minimal, and the company has largely avoided significant borrowings, preferring equity funding to support development and exploration. For example, a capital raise of approximately A$38.5 million in late 2025 provided a clear runway to expand resource work at Pinnacles and support production activities.

Cost structures reflect the realities of running an underground and near-surface mining operation. Operating costs are balanced by by-product credits from silver and lead, which improve overall margins on zinc production, an essential dynamic in low-grade base-metal environments. While exact all-in sustaining cost figures vary by quarter and metal prices, the integrated nature of Rasp’s metallurgy helps offset some downturns in any single commodity.

Broken Hill Mines does not currently pay dividends. It prioritises using free cash flow to fund expansion and geological work in a market where commodity prices remain volatile but trending upward. Investors typically assess its value not on yield but on resource growth, production scale-up, and earnings potential as Pinnacles and other drilling results convert into economic ounces.

Outlook

The outlook for Broken Hill Mines is anchored in expanding production, resource upgrades and the broader commodity price environment for zinc, silver and lead. At the core of its growth thesis is the Rasp Mine, which has already begun producing metal and generating cash flow. With increasing metallurgical recoveries and a defined processing plant capable of handling significant tonnage, BHM has a baseline production profile that supports ongoing operations and funds additional initiatives.

A key near-term catalyst is the acceleration of drilling and development at the Pinnacles project. Recent drilling has returned exceptionally high grades of silver- and zinc-equivalent minerals, and the company is targeting a future open-pit operation that could supply ore to the existing Rasp processing facilities. If Pinnacles transitions into production on a meaningful scale, it could add substantial volume and cash flow over the medium term.

Commodity price trends are another critical factor. Zinc and silver prices have been rising, driven by tight global supply and steady industrial demand, especially for zinc’s use in galvanising and silver’s role in both industrial and precious-metal demand. Continued strength in these metals would enhance Broken Hill Mines’ revenue potential, as by-product credits from silver and lead improve overall project economics.

Capital management also supports the outlook. The company’s recent A$38.5 million capital raise and financing facility provide a runway to fund development without immediate dilution, and its relationship with offtake partners ensures near-term market access for concentrates. This financial backing reduces execution risk compared with juniors that rely purely on market conditions for funding.

Operationally, the ramp-up of additional ore bodies, such as Blackwoods at Rasp, and systematic drilling aimed at extending mineral resources could materially increase reserves and extend mine life. Positive exploration results have already shown potential beyond current resource envelopes, and continued success could lead to revised resource estimates that underpin long-term mine plans.

However, risks remain. Mining projects inherently face commodity price volatility, execution challenges and regulatory considerations, all of which can impact timelines and costs. For BHM, navigating the transition from early revenue into sustained production growth depends on continued exploration success, favourable market conditions and careful capital allocation. Despite these uncertainties, the combination of production momentum, rising metal prices and strategic resource development positions Broken Hill Mines for a promising next chapter in its evolution.

2. Aurelia Metals Ltd (ASX: AMI)

Market Capitalisation: $423.14M

Source: asx.com

Aurelia Metals Limited is an Australian mining and exploration company focused on producing a mix of base metals and precious metals from underground operations in the Cobar Basin of western New South Wales. It runs three primary mines, Peak, Hera and Dargues, which collectively produce gold, silver, copper, lead and zinc. Aurelia is also advancing the Federation Project, a recently commissioned development that is expected to add to production and expand the company’s footprint in base-metal mining.

The company has roots dating back to 1994 and transformed over time into a diversified metals producer with both operating assets and growth projects. Its operations combine ongoing cash-flow generation with exploration upside, particularly in the Cobar region, where multiple prospects and extensions continue to be tested and expanded.

Aurelia’s strategy is built around operational efficiency, disciplined exploration and the optimisation of its asset base, using cash flow from existing operations to fund growth without heavy reliance on external financing. It has also approved and begun development on the Great Cobar Project. This high-grade copper extension aims to reweight the company toward higher copper production as global demand for the metal grows.

Mining infrastructure in the Cobar Basin, including processing plants, haulage networks and on-site facilities, provides Aurelia with logistical advantages compared with greenfield explorers. The company’s management emphasises continuous improvement and cost reduction while extending mine life through resource development, drilling and optimisation studies.

Financials

Aurelia Metals’ financial performance for the year ended 30 June 2025 showed a strong turnaround and profitable operations after years of investment in base-metal projects. In its FY25 results, the company reported a net profit after tax of $48.9 million, compared with a loss in the prior year, highlighting improved operational efficiency and support from commodity prices. EBITDA climbed about 69 % year-on-year.

Revenue is also meaningful for a mid-tier miner. Over the 12 months to June 2025, the company generated around AU$343.47 million in sales, a solid performance reflecting ongoing production across its mining operations. This revenue base provides a sturdy platform for funding growth and sustaining development projects without excessive reliance on debt.

Aurelia’s cash flow from operating activities increased by nearly 29% to about AU$129.7 million, indicating the business is generating real cash rather than just accounting profit. The company ended the year with about AU$110.1 million in cash on hand, giving it liquidity and flexibility to fund the Federation ramp-up and the Great Cobar Project.

Balance sheet metrics are healthy. The business carries limited debt relative to its asset base and cash holdings, making it well-positioned to withstand commodity price fluctuations or short-term economic pressures. The company’s market valuation is several hundred million dollars, reflecting investor confidence in its diversified metals exposure and growth outlook.

Profit margins show underlying strength, and key performance indicators such as earnings per share and operating cost reductions indicate the company is moving toward more efficient operations. Costs per tonne processed are expected to decline further as new mining sources ramp up.

Aurelia does not currently pay dividends, choosing instead to reinvest cash into exploration, development and optimisation of its mining operations. Growth capital is self-funded mainly through internal cash flow rather than equity dilution, a positive signal for long-term investors.

Outlook

Aurelia Metals’ near-term outlook centres on expanding production, reweighting its metal mix and advancing growth projects that could deliver substantial incremental output over the next few years. With strong cash generation in FY25 and more than AU$110 million in liquidity, the company appears well-funded to pursue both operational and development objectives.

One of the clear catalysts is the ongoing ramp-up of the Federation mine. Federation commenced commercial production in July 2025 and is expected to scale up significantly, with ore mined projected to rise from around 100 kt in FY25 to roughly 320–340 kt in FY26, as part of a broader plan to reach 600 kt per annum by FY28. This ramp-up can meaningfully enhance Aurelia’s overall metal output and cash flow.

Beyond Federation, the Great Cobar Project stands out as a strategic growth asset. Already approved and with development underway, it is expected to contribute higher-grade copper output as it progresses toward full production. Management has set an ambitious target of reaching about 40 kt of copper-equivalent production by FY28, which would shift the company’s revenue mix toward a metal with strong long-term demand fundamentals.

Metals price outlook also plays in Aurelia’s favour. Broader base-metal demand, especially for copper and zinc, remains supported by infrastructure investment, electrification and renewable energy applications. Higher base-metal prices tend to lift mining margins overall, particularly for diversified producers like Aurelia with exposure to multiple commodities.

Exploration success in the Nymagee district and other Cobar Basin targets provides optional upside. New drilling results extending mineralisation could support longer mine life and increased reserves, both critical factors in sustaining production levels and improving project economics.

Operationally, continued cost optimisation and productivity improvements aim to lower costs per tonne and enhance margins. Early evidence suggests improvements in operating metrics and cost controls are contributing to stronger financial performance.

Risks remain, including commodity price volatility and execution risk on new projects and permitting timelines, but Aurelia’s diversified asset base, cash flow strength, and project pipeline create a constructive outlook. If metal prices stay supportive and development milestones are met, the company could deliver steady production growth and earnings expansion over the next several years.

3. Sandfire Resources Ltd (ASX: SFR)

Market Capitalisation: $8.27B

Last Price: $18.00

Source: asx.com

Sandfire Resources Limited is a major Australian mining and resources company focused primarily on copper production, with additional exposure to gold, silver and zinc through its global portfolio of mining operations. Founded in 2003 and headquartered in West Perth, Western Australia, Sandfire has grown into one of the ASX’s most significant mid-tier mining producers, combining operational scale with international diversification.

The company’s early success came from the DeGrussa copper-gold mine in Western Australia’s Bryah Basin, a high-grade discovery that helped establish Sandfire’s reputation as a top-tier miner. Over time, Sandfire has expanded beyond Australia through strategic acquisitions and project developments, most notably the MATSA mining complex in Spain and the Motheo copper project in Botswana. These operations produce copper-dominant output, with valuable by-products such as silver and zinc, thereby broadening the company’s commodity exposure.

The MATSA operation, located in the world-renowned Iberian Pyrite Belt, is a cornerstone of Sandfire’s portfolio, generating consistent production of copper, lead and zinc concentrates containing silver. The Motheo project in the Kalahari Copper Belt further adds to the company’s global footprint, supporting long-term growth outside of Australia.

Sandfire also holds interests in the Black Butte copper project in the United States and various exploration assets in Europe and Australia. These assets contributeto optionality for future expansion and potential resource growth.

The company’s stated mission is to be a sustainable global mining producer, contributing to the world’s transition to cleaner energy and electrification through copper, a metal essential to power grids, renewable energy infrastructure, and electric vehicle systems. Sandfire’s management emphasises operational resilience, cost discipline and strategic growth to maintain and extend its position in the global mining sector.

Sandfire is listed on the Australian Securities Exchange under the ticker SFR and is a constituent of the S&P/ASX 100 Index, reflecting its size and significance in Australia’s materials sector. Its diversified production base across multiple countries and metals helps balance commodity price swings and positions it as a core holding for investors seeking exposure to the base metals cycle.

Financials

Sandfire Resources delivered a standout financial performance in FY2025, reporting record revenue of about US$1.176 billion, up roughly 26 % from the prior year, and a significant turnaround from losses to profit. The company posted a statutory profit after tax of around US$90 million compared with a loss the previous year, illustrating a strong rebound and operational efficiency gains.

This impressive top-line performance was supported by increased production volumes at key assets, including the MATSA mining complex in Spain, and by solid contributions from the Motheo project in Botswana, even as the industry faced global challenges, including weather disruptions and power constraints. Total copper-equivalent production grew by bout one year-on-year, underscoring the business’s resilience.

Sandfire’s gross margins have remained healthy, reflecting strong realised metal prices and disciplined cost management. While exact segment breakdowns vary, copper remains the principal revenue driver, bolstered by silver, zinc and lead by-product credits that enhance overall profitability. The company’s operating cash flow also improved markedly, driven by higher production and stronger sales, which provides flexibility for reinvestment and debt reduction.

On the balance sheet, Sandfire holds a solid cash position with more than AUD 110 million in cash and equivalents and a relatively low debt profile, with debt-to-equity ratios indicating manageable leverage. This financial strength gives the company room to fund ongoing operations, exploration, and development without relying heavily on external financing.

Profitability metrics such as earnings per share (EPS) are positive, and forecasts suggest continuing growth in earnings and revenue over the coming years. Analysts expect earnings to grow at an annualised rate of roughly 22 %, while revenue could increase about 5–6 % annually as the company expands production and optimises outputs.

Sandfire also maintains a dividend yield, providing shareholder returns and reflecting confidence in its cash flow generation. While commodity price volatility can affect results, the company’s financial transformation in FY25 signals a solid footing in a cyclical industry.

Outlook

Sandfire Resources’ outlook is shaped by ongoing production growth, strategic project development, and supportive commodity demand, particularly for copper, silver and zinc. With record FY2025 results behind it, the company is positioned to build momentum into FY2026 and beyond, driven by incremental production increases and operational optimisations.

One near-term catalyst is guidance pointing to further growth in copper-equivalent production, with forecasts suggesting output could rise by about 2 % in FY26. This continued production expansion, even amid rising costs in some operations, supports revenue stability and margin resilience.

Sandfire’s global asset base also provides diversification and optionality. The MATSA complex in Spain remains a key cash-flow engine, producing copper with zinc and lead by-products that benefit from rising base-metal prices. The continued ramp-up of Motheo in Botswana adds scale and strategic presence in one of Africa’s emerging copper belts.

Beyond current mines, Sandfire holds interests in other development and exploration assets that could unlock future growth. For example, the Black Butte project in the United States offers value optionality if regulatory and permitting pathways progress smoothly, although it has faced challenges in the past. Eldorado and other regional exploration programmes further support the pipeline.

Analyst forecasts point to continued earnings and revenue growth, with expectations of double-digit EPS increases supported by stable operations and rising commodity prices. This growth outlook underpins investor confidence, even as some price-target models suggest the stock may be fairly valued or modestly overvalued near current levels.

The broader commodity environment also supports Sandfire’s strategy. Copper demand remains strong due to electrification, renewable energy build-outs and infrastructure investment. At the same time, zinc and silver by-products benefit from supply constraints and industrial demand, a potential boon for Sandfire’s diversified revenue mix.

Operational execution will be key. The company continues to prioritise cost control, productivity improvements and sustainable mining practices to protect margins in a volatile market. Keeping unit costs under control amid inflationary pressures and managing project execution risks in international jurisdictions are ongoing priorities.

4. South32 Ltd (ASX: S32)

Market Capitalisation: $15.98B

Last Price: $3.550

Source: asx.com

South32 Limited is one of Australia’s most diversified mining and metals companies, headquartered in Perth, Western Australia. It was created in 2015 when BHP spun off a suite of mid-tier assets. Since then, it has grown into a truly global miner with operations across Australia, Southern Africa, South America, Mozambique, and the United States. The business is listed on the ASX and also trades on the London and Johannesburg stock exchanges, reflecting its international footprint.

What makes South32 stand out is the breadth of commodities it produces. Its portfolio spans bauxite, alumina and aluminium, manganese, nickel, silver, zinc, lead, copper and metallurgical coal, giving it exposure to a wide range of markets from base metals to industrial minerals. This diversification helps balance performance when specific commodity prices swing, and speaks to the company’s strategy of broad exposure rather than reliance on one single metal.

Some of South32’s flagship assets include the Worsley Alumina operation in Western Australia, one of the world’s largest alumina refineries, and the Cannington Mine in Queensland, a major producer of silver, lead and zinc. It also operates manganese mining in Australia and South Africa, and has interests in aluminium smelting and other processing assets around the world.

The company’s strategy is centred on responsible resource development and long-term value creation. With a purpose to “make a difference by developing natural resources, improving people’s lives now and for generations to come,” South32 emphasises safety, sustainability and community engagement alongside its growth goals. Its global spread of assets provides a hedge against regional risks and currency fluctuations, while its diversified commodity mix positions it well for a range of economic conditions.

South32 also undertakes ongoing exploration and expansion work on its existing leases and in new jurisdictions, aiming to extend mine lives and add future production capacity. That means it’s not just a producer today but also a developer of tomorrow’s mining prospects.

Financials

South32’s financial profile in FY2025 reflects both its scale and diversification, with substantial revenue and earnings showing the benefits of a broad commodity mix. Over the year ended 30 June 2025, the company reported revenue of about US$8.82 billion, up from the prior year, with a robust operating margin of nearly 23%, indicating solid profitability in a challenging mining environment.

Net results were especially notable. South32 posted a net profit after adjustments of about US$325 million in FY2025, a sharp turnaround from a loss the previous year. This recovery reflects stronger realised prices for key commodities and better overall operational performance across its asset base.

On the income statement, revenue growth was underpinned by improved commodity markets for metals such as aluminium, manganese and zinc, while costs were tightly managed across segments. The company’s gross profit climbed meaningfully as production increased, while per-unit costs remained competitive.

Balance sheet strength is another highlight. South32 carries manageable long-term debt relative to its asset base, with liabilities around US$2.09 billion, and maintains strong cash flows from operations. That gives it liquidity and flexibility to fund ongoing capital expenditure, exploration and shareholder returns without excessive reliance on external financing.

Cash generation remains solid through operating activities, providing a base for dividends and growth investments. South32 continues to pay dividends to shareholders, with a history of interim and final payouts that reflect confidence in its cash flow position and long-term earnings stability.

Diversity across commodities helps smooth earnings volatility. When one segment, such as aluminium, faces headwinds, other products, such as zinc, manganese, or copper, can help stabilise revenue. That mix is reflected in the company’s underlying EBITDA, which remains robust at around US$1.9 billion, signalling healthy earnings before interest and taxes.

Analyst consensus forecasts suggest modest future earnings growth, though share price performance has been mixed recently compared with broader markets. Market forecasts place the average one-year price target near AU$3.7, reflecting both upside potential and some caution in valuations.

Outlook

The outlook for South32 hinges on commodity markets, operational execution across its global assets, and strategic positioning for future metal demand. As a diversified miner, it is tied not to a single metal but to trends across aluminium, base metals such as zinc and copper, and industrial minerals such as manganese and alumina.

For FY2026 and beyond, analysts expect continued production and modest revenue growth at South32. Forecasts point to potential revenue of around US$6.8 billion by 2028, with earnings climbing to about US$1.1 billion, underpinned by stable commodity prices and sustained demand for metals used in infrastructure and energy transition technologies.

On the operational front, South32 is focused on optimising its existing portfolio. That includes boosting output at manganese operations, where recent quarterly results showed strong recovery after weather-related disruptions, and managing cost challenges in segments like aluminium, where commodity prices and energy costs can be volatile.

Strategic repositioning is also underway. The company has made leadership changes to intensify its focus on priority metals such as copper and zinc, which are critical to electrification and decarbonisation trends. Projects like Hermosa in the U.S., which includes high-grade zinc resources, are central to that strategy, though permitting and execution timelines remain key risks.

However, challenges exist. South32 recently announced it will place its Mozambique aluminium smelter into care and maintenance due to power supply constraints, a move expected to save costs but also reduce aluminium output in the near term. That highlights how operational and energy-supply risks can impact results.

Global commodity demand, especially for base metals tied to electrification and renewable energy, remains supportive of prices in the long term. As infrastructure spending and electric-vehicle adoption grow, products such as zinc, copper, and manganese could see sustained interest, benefiting diversified producers such as South32.

Dividend payments remain part of South32’s shareholder return approach, with fully franked dividends indicating confidence in cash flow. This consistency adds appeal for income-seeking investors even amid cyclical earnings.