NEW YORK Declining London
Metal Exchange zinc prices have pushed U.S. zinc alloy premiums
down, although special-high-grade premiums remain firm.
Three-month LME zinc fell to
$1,886 per tonne in the March 27 official session, down 2.8
percent from $1,940.50 the previous day and 14.8 percent below
this years high of $2,213 per tonne on Feb. 12.
Premiums for die casting alloys
Nos. 3 and 7 fell to 17 to 19 cents per pound from 18 to 20
cents previously; No. 5 alloy slipped to 19 to 21 cents per
pound from 20 to 22 cents; and No. 2 alloy fell to 22 to 25
cents per pound from 23 to 26 cents.
Premiums for zinc-aluminum
foundry alloy No. 12 narrowed to a range of 24 to 25 cents per
pound from 24 to 26 cents, and No. 27 alloy fell to 27 to 30
cents per pound from 28 to 31 cents.
Market participants said that
automotive demand has stayed pretty robust while housing
continues to improve, but demand is not strong enough that
premiums can resist the downward pull of LME zinc prices.
Sinking LME prices encouraged
some spot special-high-grade zinc buying this week, although
volumes remain modest, producers and consumers said.
"Theres been a little more
activity since markets are down. Naturally, when the price is
down people become more interested. But Id say
picking up is the wrong phrase. Things are just
better because the price is lower," one zinc consumer source
"There are a few truckloads here
and there," a trader said.
Special-high-grade zinc premiums
remained steady at 7.5 and 8.5 cents per pound. Some market
participants said sales were concluded at between 8 and 8.5
cents, but others maintained that getting a spot sale at 7.5
cents was not difficult.
"I would put premiums at a
strong 8 to 8.5 cents (but) Im sure you could still get
it at 7.5," a second consumer source said. "It seems like
producers ask for more and then threaten that prices are going
up, but then you hear of these deals being closed at 7.5. So
its all hype and speculation to bolster the prices."
Large volumes of zinc remain
tied up in financing deals in New Orleans warehouses.
LME-listed warehouses in the Louisiana city held 750,725 tonnes
of zinc March 28, with queues for metal reportedly out to next
summer. And while 19,900 tonnes of zinc entered into New
Orleans warehouses and 17,525 tonnes were shipped out between
March 8 and 18, sources said the metal is not going to the
physical market but simply being shifted off warrant.