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Zinc alloy premiums rise on short supply of SHG

Keywords: Tags  zinc, alloy, alloy makers, comex, premiums, prices

NEW YORK — Several zinc alloy premiums moved higher June 20 as supply of special-high-grade (SHG) material remains tight.

AMM’s delivered premium for No. 2 zinc alloy increased to between 26 and 28 cents per pound from 25 to 27 cents previously, the premium for No. 5 zinc alloy rose slightly to between 21 and 23 cents per pound from 20 to 22.5 cents previously and No. 27 alloy premium increased to between 30 and 33 cents per pound from 28 to 31 cents previously.

Special-high-grade premiums, meanwhile, were unchanged at 8 to 9 cents per pound, though some market participants reported rumors of metal trading as high as 10 cents per pound over the London Metal Exchange zinc price.

Zinc alloyers forecast premiums to rise further in the latter part of the year due to the supply constraints.

Suppliers "are talking about it going up into next year," one alloy maker said. "It’s very bullish. Zinc stocks have declined."

Global zinc stocks in LME-listed warehouses decreased to 1,071,425 tonnes June 20, down from 1,110,150 tonnes June 6.

Stock in U.S. warehouses totaled 758,525 tonnes June 19, according to the most recent available data from the exchange.

Cash zinc prices on the LME rose slightly to $1,809 per tonne (82 cents per pound) on June 21 from $1,795 per tonne (81 cents per pound) on June 20.

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