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Euro zinc premium jumpsThe shortage of zinc in Europe has forced premiums ever higher, with traders and producers claiming that those caught short of material are being forced to pay premiums as high as $180 per tonne.Spot zinc premiums rose to $160-180 per tonne over London Metal Exchange cash basis fot ex-Rotterdam for special high grade (SHG) from $130-135 per tonne earlier in March and $100-105 per tonne in December. On a delivered basis, premiums exceed $200 to trade as high as $220 per tonne.Demand is normal. It's more availability that's where the problems is, commented a source at a European producer. There's a physical shortage of zinc.
Record zinc prices on the London Metal Exchange have triggered a spate of panic buying by some consumers. On Friday, three-month zinc prices reached all-time highs when it closed the final kerb session at $2,589 per tonne.Everybody in the market is paying this,"
With the high zinc price, there is some panic buying as people see prices go up.Zinc's strong performance has come at a time of supply disruptions and production cutbacks across the globe. Production at the San Luis Potosi zinc refinery of Industrial Minera Mexico SA de CV, a Grupo Mexico SA de CV subsidiary, as well as the closure of Korea Zinc's closure of Big River Zinc have affected supplies.
In Europe, MHD Sudamin closed last summer and Umicore has now stopped producing continuous galvanizing grade (CGG) zinc.The price increase has come at the same time as record prices on the LME and a significant drawdown of stocks. On Monday, stocks fell a further 425 tonnes to 305,100 tonnes, their lowest level since July 2001.
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