Special high-grade zinc premiums fell this past week amid
slower demand, traders and consumers said.
delivered premiums for spot zinc decreased to 8 to 9 cents per
pound Sept. 26 from 9 to 10 cents previously.
attributed the slowing in demand in part to a potential U.S.
government shutdown looming over the country as a divided
Congress debates whether to increase the debt ceiling.
"With so much going on
on the political front, its making people hesitate just a
little hoping for cheaper prices," an alloy producer said,
referencing the debt ceiling issue being discussed in
Cash zinc prices on
the London Metal Exchange have risen over the past week to
$1,880 per tonne (85.3 cents per pound) Sept. 27. Prices
tumbled to $1,793 per tonne (81.3 cents per pound) in July,
when many customers were purchasing for the fourth quarter, the
"It wont pick up
until they fix premiums for next year," he said.
But zinc prices are
expected to be higher in 2014, a second alloyer said,
referencing ongoing queues at LME-listed warehouses.
"Even though LME
stocks are coming down, its just going to other
warehouses," he said.
Zinc stocks have
decreased steadily throughout September, with most metal
leaving New Orleans and occasionally Baltimore. U.S.-based
warehouses held 708,275 tonnes Sept. 25 compared with 724,075
tonnes Sept. 2, according to the most recent LME data.
copper prices have bumped up zinc alloy No. 2 premiums, several
alloy makers told AMM.
"(Most) alloy prices
are hovering at the same levels and we hoped it would come
down," a third alloyer said. "But No. 2 is higher because of
the price of copper."
No. 2 zinc alloy
contains between 2.6- and 3.3-percent copper, a higher
percentage than most other alloys.
premium for zinc alloy No. 2 rose to 25 to 27 cents per pound
Sept. 26 from 23 to 25 cents per pound previously. Comex copper
for December, the most actively traded contract, settled at
$3.3070 Sept. 27, up from around $3.20 on Sept. 13.