NEW YORK Zinc alloy producers have forecast higher spot prices for 2013 due to higher contract premiums for special-high-grade (SHG) zinc, with the contract season largely drawing to a close.
One alloy producer told AMM that his company would look at moving alloy prices up by a penny going into next year. SHG contract premiums have been reported in a range of 7.5 to 8.5 cents by consumers and producers (amm.com, Nov. 14), at least a penny higher than contract premiums for 2012.
A second producer agreed that the No. 3 benchmark alloy would probably reach 20 cents per pound shortly into the new year, with the current spot premium steady at 17 to 19 cents per pound.
"Im not looking to sell forward for next years spot market because well be higher on the premiums," the first producer said.
Spot market activity has decreased in recent weeks, which sources attributed to a seasonal slowdown.
"Theres hardly anything going on in the spot market," one trader said.
Meanwhile, SHG contract negotiations continue for a few players, with one consumer saying that he is currently being offered material in a range of 7.5 to 8 cents per pound.
Sellers were citing higher freight and import costs for 2013 in justifying the higher premiums, he said.
Producers have previously said that they also see the North American zinc market as being in a supply deficit.
The global refined zinc market recorded a 157,000-tonne surplus in October, according to data published Wednesday by the International Lead and Zinc Study Group, Lisbon, Portugal.