Nexa Resources (NEXA): Reading the Zinc Market Right Now

Zinc is not a glamorous metal. It doesn’t carry the narrative weight of copper or the geopolitical magnetism of lithium. But that’s precisely why Nexa Resources (NYSE: NEXA) is worth a careful look right now – not because the story is clean, but because the numbers are getting harder to ignore.

Nexa closed FY2025 with net revenues of $3.0 billion, up 9% year-over-year, and net income of $223 million – a sharp reversal from a $187 million net loss in 2024. Adjusted EBITDA reached $772 million, up 8%, supported by higher zinc and by-product prices. Q4 alone delivered $903 million in revenue, beating analyst expectations by 16.5%, with EPS of $0.60 exceeding forecasts by nearly 20%. The stock surged 16.1% in after-hours trading following that report.

Zinc production rose 24% year-over-year in Q4 to 91,000 tonnes. The Aripuanã mine – a long-troubled asset – hit its highest quarterly output ever. Net leverage improved to 1.7x trailing twelve-month adjusted EBITDA. Free cash flow projections from analysts show a potential jump to $248 million by 2027, up from roughly $8 million in 2025.

The commodity backdrop is where things get complicated. LME zinc traded near $3,400 per tonne in early 2026, up roughly 19% year-over-year. But supply is building. The International Lead and Zinc Study Group projects a refined zinc surplus of 271,000 metric tons in 2026, with global mine output expected to rise 2.4% to 12.8 million MT. Higher prices attracted more production. That math is not favorable into year-end.

Slight tangent, but it matters: Nexa’s smelting segment saw adjusted EBITDA fall 55% in 2025, squeezed by lower treatment charges and higher raw material costs tied to rising zinc prices. Mining and smelting don’t always move together. That divergence is one of the more underappreciated dynamics in this name.

As of mid-June 2026, NEXA is trading near $13.87 with a 52-week range of $4.44 to $16.89. The stock has made a significant run. Analyst consensus sits at Hold, with a median price target around $9.75 from some sources and a Citi upgrade to $16 issued in late May 2026. The spread in targets reflects genuine uncertainty – not confusion, but honest disagreement about where zinc settles.

Options Snapshot

Implied volatility on NEXA has been elevated, with IV percentile readings above 83% as recently as late 2025. That level of premium pricing reflects genuine uncertainty around zinc price direction and operational execution at Cajamarquilla, where a May 2026 fire briefly halted smelter operations before a gradual restart. For traders expecting continued price swings, a defined-risk structure – such as a long call spread or a short strangle capped with defined legs – would keep exposure bounded while allowing participation in either direction.

Framework for Traders

• Bull case: Zinc inventories remain at multi-year lows (153,800 tonnes globally as of Dec 2025), Aripuanã ramp continues, copper expansion accelerates. For traders expecting upside continuation, a defined-risk call spread above current levels may be worth evaluating.
• Bear case: Surplus builds to 271,000 MT in 2026, treatment charges compress smelting margins further, Brazil real weakens. If you believe the supply overhang dominates, a defined-risk put structure would allow for downside participation without unlimited exposure.
• Neutral case: Price stays rangebound between $10 and $15. A short strangle or iron condor structure – with clearly defined risk on both sides – would be appropriate for traders who believe volatility is elevated but directionless.

The CEO has been direct about next steps: stabilize Aripuanã, reduce debt, then push into copper through potential acquisitions. That three-part plan is clear. Whether the timeline holds is the question the market is still working through.