NEW YORK Horsehead
Holding Corp. returned to profitability in the first quarter
after posting four consecutive quarterly losses as soaring zinc
premiums more than offset lower shipment volumes, the
Pittsburgh-based zinc producer and electric-arc furnace dust
In the first quarter, Horsehead
saw zinc product shipments drop 14.9 percent year over year to
42,772 tons, largely due to a decision to build inventory ahead
of its scheduled transition to its new smelter site in
Mooresboro, N.C., later this year. The new facility, announced
in 2011 as the replacement site for its existing Monaca, Pa.,
zinc smelter, remains on schedule for startup in the second
half of 2013, president and chief executive officer James
Hensler said on the companys May 6 earnings call.
"In terms of the inventory, we
would expect to build something on the order of about 8,000 to
10,000 tons of inventory, mostly metal, with a portion of that
being oxide, between now and the end of the third quarter,"
Hensler said of the companys stockpiling efforts.
But while shipments were down in
the first quarter to build stock ahead of the upcoming
relocation, those lower volumes were sold at a higher average
price of $1.04 per pound, up from 95 cents per pound in the
year-ago quarter, the company said. Those higher prices reflect
stronger realized zinc premiums, rather than any change in the
London Metal Exchange zinc price, the company said.
In the first quarter,
Horseheads realized premiums on zinc metalprimarily
a reflection of contract salesaveraged 5.8 cents, up 2
cents from the first quarter of last year, the company said.
Realized premiums for zinc oxide in the quarter were about 12
cents per pound, an increase of 10 cents compared with the
prior years first quarter, it said.
The company said it operated its
zinc smelting facility at full capacity during the first
quarter. However, that changed in April, when the company idled
one of its smelting furnaces due to the unplanned shutdown of
two special-high-grade zinc columns and one oxide refining
column, the company said in outlook commentary accompanying its
first-quarter results. The columns are expected to be back
online in May, with the Monaca smelter then expected to run at
full capacity straight through until its final shutdown later
In the three months ended March
31, Horsehead reported net income of $2.8 million vs. a net
loss of $8.5 million in the same quarter a year ago on sales of
$118.3 million compared with $111.4 million in the same quarter