NEW YORK Zinc
premiums have held over the past two weeks but alloy alloy
makers are bracing for potentially higher special-high-grade
contract premiums for 2014.
"Thats sort of
where Im starting to look to try and have zinc locked in
into 2014," one alloyer said. "But based on the numbers
Im hearing, well, I dont like to hear 10 cents and
delivered premiums for spot zinc held at 9 to 10 cents per
pound Sept. 12, still above the 8 to 9 cents reported in
"Premiums on raw zinc
are going to definitely go up next year if the minerals
companies are able to push (higher contract premiums) through,"
a second alloy maker said, adding that he expects spot premiums
will be over 10 cents next year.
Ongoing queues to move
zinc out of London Metal Exchange-approved warehouses in New
Orleans continue to restrict supply to the market, sources
said. According to the most recent LME data, 12,150 tonnes of
zinc entered warehouses in New Orleans from Sept. 6 to Sept. 11
while 10,050 tonnes were delivered out, bringing LME stocks in
US-based warehouses to 718,650 tonnes Sept. 11.
Demand for zinc
remains low but premiums are likely holding as producers look
to combat falling LME prices.
three-month zinc bid price has averaged $1944.29 per tonne so
far in 2013, down 2.46 percent from $1993.34 per tonne in
Zinc cash prices have
fallen from a peak of $1,955.5 per tonne (88.5 cents per pound)
Aug. 19 to $1,833.50 per tonne (83.2 cents per pound) Sept.
"We dont see any
new business out there," the first alloyer said, though he
added that his company is busy with current business until
automotive are two markets to watch for increased zinc demand,
but as automakers try to reduce vehicle weight for fuel economy
standards zinc use has declined, the third alloy maker
The first alloy maker
agreed, saying one of his clients is experimenting with plastic
ignitions , rather than zinc-based ignitions.
Until construction and housing recover, alloy makers will
lack growth opportunities, the third alloyer said.