Zinc premiums hold firm on demand

Dec 17, 2010 | 12:56 PM |

U.S. zinc premiums are holding firm around 5 cents per pound supported by stronger demand, rising costs and tighter availability.

Some consumers are frustrated at the firm spot premiums, which remain between 4.5 cents and 5.5 cents per pound, but producers point to rising demand and the lack of availability despite the high stocks in London Metal Exchange-bonded warehouses as justification for that level.

"It's everything from energy to transportation costs. There's not a lot we can do," said a buyer. "A lot of it is locked up in warehouse deals."

There are signs that premiums could be rising, with one physical trader telling AMM a few companies have agreed to premiums of 6 cents per pound. Some low-volume deals were reported as high as 7 cents per pound.....

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