Special-high-grade (SHG) zinc premiums are holding firm and
could be poised to inch higher as sinking prices on the London
Metal Exchange encourage some would-be buyers to come in off
the sidelines, sources said.
Three-month zinc closed the
official session on the LME at $1,889.50 per tonne April 11, up
slightly from the previous week but still down nearly 15
percent from this years high of $2,214 per tonne recorded
That drop has encouraged a
little interest, with some opportunistic buyers looking to book
out into 2014, one consumer source said.
"There have been some people
wanting to come in and buy for next year," the consumer said.
"I think people look at the zinc price and everyone is
wondering how much lower it will go before it springs
A trader confirmed he has seen a
slight bump in activity, although he maintained zinc demand is
still nothing to write home about.
"We havent seen a huge
uptick in demand," the trader said. "(But) there are a few
people calling; theres a little bit of an uptick."
AMMs SHG zinc
premiums held steady this week at between 7.5 to 8.5 cents per
pound. "We havent bought much SHG over the past couple of
months. We did the majority of our buying in December. But
Id peg premiums at a solid 8 (cents)," a second consumer
But sources said they there were
indications those numbers could rise.
"I was able to buy cheaper, but
I do find there are higher numbers out there," the consumer
said, citing purchases this week at 7.5 cents and noting that
demand is stronger in some sectors than others. "Demand is not
bad. It goes back to whatever my customer is making. If
theyre in automotive, its good at the moment. If
theyre in industrial, that isnt so good."
Meanwhile, earlier issues
reportedly impacting some SHG zinc output from HudBay Minerals
Inc. have since been resolved, multiple sources told
A company spokesman declined to
comment, but a number of consumer and trader sources said
Toronto-based HudBay had experienced some minor off-grade
production issues in March.
"HudBay had a little hiccup, but
its been cleared," the first consumer said, adding that
customers ability to get material was not affected.
"Theyre back and
producing," a trader confirmed.