Annual zinc premiums up in Asia on supply tightness concerns

Asian zinc premiums have increased for 2018 contracts, compared with a year ago, on the back of supply tightness concerns, multiple sources told Metal Bulletin.

The bulk of China contracts for 2018 have been settled at premiums of $155-165 per tonne on cif Shanghai basis, up around $20 per tonne from 2017, according to Metal Bulletin’s assessment.
“The Shanghai import arbitrage opened twice in 2017, which is really rare, and we still do not have much spot stock of zinc ingots,” a Shanghai trader said.
In the first 11 months of 2017, China imported 575,454 tonnes of zinc metal, up 43.5% from the same time last year, mainly during the twice-opened arbitrage window.
“Although there will be more zinc concentrates supply this year, mining, smelting and shipment will need a long period of time, so the metal will still be kind of tight,” a second trader said.
“High annual contract prices have helped to support the spot premiums, while spot demand is a little weak in slack season,” a Shanghai-based trader said.


Echo Ma

Vivian Teo

January 11, 2018

12:00 GMT