NEW YORK Delivered
premiums for special-high-grade zinc and zinc alloys have
fallen in recent weeks as lower terminal market prices and
stagnant demand put downward pressure on spot material.
"The LME (London Metal Exchange)
has come down, and sales continue to be sluggish," one domestic
alloy producer told AMM. "Its still a rough U.S.
economy. Zinc has a huge place in the home and housing
industry, (and) new housing remains depressed."
Delivered premiums on
special-high-grade material fell to 7 to 8 cents from 7 to 8.5
cents per pound previously.
Amid what market players
described as "steady" and "quiet" demand, falling zinc prices
and the ready availability of the material have pushed premiums
lower. "Any increases (in orders) weve had as of late,
weve been accommodated," one zinc buyer said.
"Theres more pressure on
premiums" because the material is readily available, a second
alloy maker agreed.
One zinc producer cited spot
special-high-grade zinc premiums of 7 to 9 cents, with the bulk
of business at 7 cents but reaching as high as 9 cents per
pound depending on location and quantity.
Premiums on die-cast and foundry
alloys fell almost across the board due to weak demand, alloy
producers told AMM. The delivered premium on No. 3
alloy fell to 16 to 18 cents per pound from 17 to 19 cents
previously. That brought alloy prices to $1.0609 to $1.0809 per
"Business is slow," the first
alloy producer said.
"Its been consistently
quiet," the second alloy producer agreed. "It really
hasnt been bad by any stretch, but obviously, demand
isnt robust." He said he has had to take prices down 1 to
2 cents below list prices in order to book business.
Demand "seems to have stalled a
little bit," a third alloy producer said.
Meanwhile, the drop in exchange
prices has drawn attention from buyers looking for availability
in 2013, some market players said.
"With the lower prices,
theres some interest for next year," one trader said.
"Nobody wants to be wrong and sell low." So far, that business
has been quoted, but not actually transacted.
The zinc producer said he had
also received inquiries for material for 2013, adding that he
was quoting at the higher end of his current spot range of 7 to
9 cents per pound for 2013 contract material.
"For premiums, where you are
right now, why would you sell at todays floor?" the
Three-month zinc settled at
$1,986 per tonne (90.1 cents per pound) in official trading on
the LME Wednesday, down 9.5 percent from a $2,195.50 per tonne
(99.6 cent per pound) on Jan. 27, the highest close thus far