Zinc premiums healthy in 2012 talks, buyers ask for optionality on volumes

Dec 23, 2011 | 04:06 AM |

Zinc producers and traders have secured stable premiums in 2012 contracts, but some consumers in Europe have asked for optionality on supply volumes, fearing further demand deterioration. Contract zinc premiums have been set at similar levels to those seen in 2011 despite recent softness in spot premiums caused by weak demand and the backwardation in nearby London Metal Exchange zinc spreads, sources told Metal Bulletin. “The backwardation has probably forced a few traders to take lower premiums but the drop hasn’t been too dramatic,” a physical trader said. “I would say premiums have fallen perhaps or $5 or $10, and I don’t expect them to move much lower,” an analyst added. Metal Bulletin European zinc premiums were $125-135 per tonne on Friday, down $10 from November 25. The backwardation in December-January spreads, widely said to have been orchestrated by....