Zinc traders eye LME stocks in New Orleans

Jul 07, 2014 | 03:16 PM | Mark Burton

Tags  LME, zinc, New Orleans, London Metal Exchange, warehouse queues, canceled warrants, Mark Burton

LONDON — Physical zinc traders are looking to pick up warrants in New Orleans following the effective disappearance of the queue to withdraw metal from London Metal Exchange warehouses at the Louisiana port.

Following an 8,775-tonne cancellation last month, physical traders are again looking at obtaining New Orleans warrants through clearing and selling the metal into the physical market.

That no one has acted yet to obtain larger volumes partly reflects that nearby LME spreads and customs duties would eat into margins for anyone importing the material into the United States, while a recent softening in regional premiums (amm.com, June 27) has caused concern among those evaluating whether to add to their physical position, sources said.

Nevertheless, the attraction of picking up zero-premium metal in a fundamentally well-supported market makes it likely that more metal will be canceled in New Orleans in the coming weeks, trade sources said. ....

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