Special-high-grade (SHG) zinc premiums appear to be firming at
around 8 cents per pound for 2013 contracts, with one producer
source saying that a persistent deficit in local supply and
steady demand have driven the increase.
The source said that his company
has already done a few deals in a range of 8 to 8.5 cents per
pound, and the company expects to close a "big chunk" of its
contracts within the next few weeks.
Negotiations have been "pretty
straightforward this year," despite premiums moving up a penny
per pound from last years levels, he said. "I think
people have more or less accepted that North America is in
deficit, and that has pushed premiums up the last couple of
years. Volumes are the same, and there havent been any
smelter closures or anything, so demand looks to be
A second producer source told
AMM that while SHG contract negotiations are still
ongoing, he expects premiums to settle at an average of 8 cents
per pound, adding that he has sold at 8.5 cents per pound.
While one consumer agreed that
SHG premiums for 2013 would be around 8 cents per pound, a
second consumer told AMM that he still expects them to
settle somewhere around 7.25 cents per pound.
A third consumer said that 2013
premiums were around "7.5 to 8.25 cents per pound," having
previously estimated that they could settle as low as 7 cents
Meanwhile, No. 3 and 7 alloy
spot premiums moved up to a range of 17 to 19 cents per pound
from 16.5 to 18.5 cents, with producers telling AMM
that a recent rise in the spot SHG premium had forced the
benchmark alloy slightly higher (
amm.com, Oct. 17).
"Were going into a dull
period. The six weeks from Thanksgiving to the New Year are
usually pretty quiet," a source at one alloy producer said.
"Jan. 1 is when things pop again."
The London Metal Exchange
three-month zinc contract closed Wednesdays official
session at $1,948 per tonne (88.4 cents per pound), up 3.8
percent from $1,876 per tonne (85.1 cents per pound) at the end