NEW YORK Zinc premiums
remained steady Feb. 14, although market participants say they
could tick up in the next few weeks.
While AMM's spot
special-high-grade (SHG) zinc premiums remained between 7.5 and
8.5 cents per pound, a number of industry participants said
getting material under 8 cents is difficult, and traders and
producers will try to push to make 8 cents per pound the new
low as they gather at the International Zinc Associations
conference in Cancun, Mexico, Feb. 25 to Feb. 27.
"Theyre a solid 8
(cents)," a trader told AMM.
A consumer source said hed
heard of offers at 7.5 cents per pound, but he thinks
everything seems to be pointing to premiums moving up and feels
that traders will make the case to push premiums north as
London Metal Exchange-listed warehouses continue to store
nearly 1.2 million tonnes of zinc, including more than 772,000
tonnes in New Orleans. Canceled warrants in New Orleans stood
at 422,425 tonnes Feb. 15, which has pushed queues for zinc out
to a year, keeping the material off the market and causing
"(Premiums) seem to be gyrating
up. The Cancun conference will lead to a very good push on zinc
pricing. It will be interesting, with the momentum more on the
upside than on the downside," the consumer source said.
"Everyone will want to talk premiums up. I personally think
(traders will) try to reaffirm that premiums should go higher
because of the warehouses."
While the warehousing situation
has raised aluminum spot premiums to record
highsAMMs Midwest spot premiums are
between 11.3 and 12 cents per poundit has not had the
same dramatic effect on zinc premiums yet, which could be due
to demand, sources said.
"Id say its pretty
quiet. Whether its automotive, appliances, computer
parts, its pretty average," an alloy producer source
said. "Its not horrible, though."
It is still possible for
consumers to get their hands on material, another consumer
source said. "From a logical standpoint, youd say yes
(the warehouses cause tightness), but from a physical
standpoint, no theyre not. There is plenty of zinc
around. And it goes to show you that however much is in the
warehouses, theres a lot more out there that
Demand for zinc does appear to
be improving as construction and housing show signs of life,
and automotive continues to be strong.
"There are a lot of positives
now. Housing seems to be moving on the upside. Appliances and
automotive are decent, too," the first consumer source said.
"Thank God cars are moving. If they werent, everybody
would have a problem."
The food and fertilizer
industries in India and China also will boost zinc demand in
the United States, he added.
Free-market zinc alloy premiums
remain steady, with the benchmark No. 3 and 7 alloys at 18 to
20 cents per pound and the No. 5 alloy at 20 to 22 cents per