NEW YORK — Free-market zinc alloy premiums have risen by a penny, with alloy producers citing increased freight costs and a perceived tightness of special-high-grade (SHG) zinc.

The benchmark No. 3 and No. 7 alloys increased to a range of 18 to 20 cents per pound from 17 to 19 cents, while the No. 5 alloy moved to 20 to 22 cents from 19 to 21 cents.

No. 8 alloy rose to 21 to 23 cents per pound from 20 to 22 cents, while No. 12 alloy shifted to 24 to 26 cents per pound from 23 to 25 cents.

Three-month zinc closed the London Metal Exchange’s official session at $1,995.50 per tonne (90.5 cents per pound) Jan. 17.

Two alloy producers told AMM that freight issues—particularly increased fuel costs and driver shortages—had forced them to push premiums higher.

"Freight is causing all the issues," one producer said. "It’s not any increase in base metal costs."

Meanwhile, some SHG sellers claimed that the material was currently in tight supply, a factor also cited by one alloy producer as prompting a rise in alloy premiums.

"It’s becoming harder to find SHG. There is less zinc available domestically," the producer said.

The spot SHG premium was steady in a range of 7.5 to 8.5 cents per pound, although some sellers said they hadn’t done any business below 8 cents.

"The spot market has been really quiet. Customers tied up a lot of their requirements under contract because they were concerned about getting metal," one seller said.

"It definitely has picked up in the last week. After Jan. 7, we started to see customers wanting to get metal on the road. That’s probably people coming back from vacation and wanting to get their ducks in a row."

Meanwhile, LME stock data indicates significant SHG tonnage being delivered in and out of the New Orleans warehouse. At least 2,500 tonnes of SHG have been delivered out of New Orleans each day for nearly a week.