South Korean smelter Korea Zinc, which posted a weak third-quarter result, is aiming to restore profitability on the back of firmer international zinc and copper prices and a new germanium business, according to a report by Chosun Biz published on November 5, 2026. The company's operating profit in the third quarter of 2026 was 141.7 billion won, more than halved from a year earlier. Citing the London Metal Exchange (LME), Chosun Biz reported that the spot zinc price stood at $3,875 per ton on November 4, up 28.7% from the low of $3,010 per ton recorded on March 19 of this year.
Over the same period, copper rose 20.1%, from $11,826 to $14,201 per ton. Chosun Biz attributed part of the copper rally to expectations of higher demand from the expansion of artificial intelligence (AI) data centers and power grids. Korea Zinc plans to expand zinc and copper sales in the remaining fourth quarter.
Its nonferrous subsidiary KZ Trading increased zinc sales volume in the third quarter by 41% from the previous quarter, while its operating profit rose from 5.9 billion won to 16.4 billion won. Australian smelting subsidiary Sun Metals Corporation (SMC) also expects further profitability improvement as carryover low-grade lead bullion concentrate (LGLC) and sulfuric acid sales normalize in the fourth quarter. Rising metal prices, however, are unlikely to translate immediately into higher profits.
Chosun Biz noted that if concentrate supply becomes tight, the treatment charges (TC) received by smelters may fall even when zinc prices rise, because miners gain stronger bargaining power than smelters when concentrate is scarce. A Korea Zinc official said that the timing of international price changes in raw material purchase prices and product selling prices differs, so the company "cannot guarantee actual profitability." The official added that, unless exchange rates and precious metal prices plunge further, the likelihood of a deeper deterioration in fourth-quarter results is limited. Brokerages expect Korea Zinc's operating profit to improve in the fourth quarter compared with the third.
Since the third quarter came in at about half of forecasts, in the 270 billion won range, the fourth quarter is expected to reach around 400 billion won, the largest quarterly figure this year. Brokerages had initially expected annual operating profit in the 1.9 trillion won range but now see it falling short by 200 billion to 300 billion won. Park Gwang-rae, an analyst at Shinhan Investment & Securities, said that stabilizing the supply chain of critical minerals is highly likely to continue as a bipartisan policy in the United States.
He added that in the short term, gold and silver prices and zinc TC are likely to determine results, and that the start of commercial germanium sales is expected to trigger new profit generation. From next year, the germanium business will begin generating full-scale sales. Germanium is a strategic mineral used in semiconductors and infrared optical equipment.
Korea Zinc had originally planned to invest 140 billion won to build new low-purity and high-purity germanium oxide production facilities, but has switched to leveraging existing nickel smelter equipment at affiliate KEMCO. By building only a high-purity refining facility, the investment will be reduced to 20 billion won, a saving of 120 billion won, or about 86%, compared with the original plan. Korea Zinc plans to recover germanium from its existing smelting byproduct F-HYD cake, which contains about 20.2 tons of germanium, and to sell low-purity germanium oxide from the first half of 2027.
Annual output is expected to reach 14.5 tons on a metal-equivalent basis. From the first half of 2028, the company plans to switch to producing and selling high-purity germanium oxide with 99.999% purity, with expected annual production of 14.2 tons at that time. Korea Zinc cited expected annual sales of about 200 billion won for low-purity products and about 250 billion won for high-purity products.
These projections assume a germanium price of $12,500 per kilogram and an exchange rate of 1,350 won. The global germanium price is currently in the range of $12,500 to $17,000 per kilogram, and the company said it is discussing long-term purchase contracts with major customers. During the germanium recovery process, the company expects to secure an additional roughly 1,000 tons of zinc per year, about 10 tons of indium and about 150 tons of copper.
Korea Zinc plans to drive a recovery in results by expanding sales in its existing smelting business and diversifying revenue sources in its rare metals business. Source: Chosun Biz (biz.chosun.com), citing LME data, brokerage estimates, Korea Zinc officials and Shinhan Investment & Securities analyst Park Gwang-rae.
Source: biz.chosun.com