GLOBAL ZINC & LEAD WRAP: US zinc premium ignores record-low New Orleans stocks; Shanghai markets subdued by arb loss

Global zinc premiums were left with little room to maneuver against exchange-stock drawdowns and high import losses this week, while persistent backwardations in the metal's forward curve kept spot trading opportunities minimal.

  • New Orleans LME warehouse stocks are at an all-time low but this failed to support the US zinc premium due to bad demand. 
  • High import loss leaves Chinese zinc market quiet. 
  • Europe market cautious of strong backwardation.
US zinc market eyes dipping stocks; premiums stable
A steep fall in on-warrant zinc stocks in the London Metal Exchange-registered New Orleans warehouses has market participants wary, with some predicting an upward move of the special high grade (SHG) zinc ingots premium.
But the premium is yet to react. Fastmarkets assessed the zinc SHG, min 99.995% ingot ddp Midwest US premium at $0.08-0.09 per lb on Tuesday November 12, stable since late August.
New Orleans warehouses hold 5,375 tonnes on-warrant stocks as of November 12, which is an “all-time low,” according to a trader.

The low inventory has not yet moved the zinc premium because spot...


Anna Xu

Hassan Butt

Rijuta Dey Bera

November 13, 2019

16:55 GMT

Shanghai, New York, London