But a recent spike in treatment and refining charges (TC/RCs) <SMM-ZNCONC-IMP> in China, the top producer of the metal used to galvanise steel, could lead to a rebound this year, some analysts expect.

The country's zinc output came in at 4.53 million tonnes in 2018, according to a survey of smelters by Antaike released on Friday. That marked a fall of 4.6 percent, or 218,000 tonnes, from 2017.

December output slipped by 4.4 percent on a daily basis from November to a monthly total of 393,000 tonnes as Zhuzhou Smelter Group, the country's top producer, went ahead with a planned relocation within southern China's Hunan province.

The company, a unit of China Minmetals Corp, said on Dec. 28 its new 300,000 tonnes per year smelter in Changning had started up and its older facility in Zhuzhou had shut down.

Explaining the steep annual drop, Antaike noted that Zhuzhou had started to reduce output in the second half of 2018, while smelters were also losing money because of low treatment charges, faced tighter funding and environmental constraints and saw new capacity launches delayed.

With overseas mine supply recovering in late 2018, however, treatment charges - paid by miners to smelters to process ore into refined metal - have now reached $180 a tonne, the highest since December 2015.

The increase "could see smelters raise run rates and weigh on prices", brokerage Marex Spectron said in a note.

Zinc was the worst performer in the base metals complex in 2018, posting a 25.7 percent drop on concerns of oversupply. It is up 0.6 percent so far this year.