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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn
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To: Ray Hughes who wrote (33)2/4/1999 10:09:00 AM
From: Stephen O  Read Replies (1) of 3270
 
3 mos LME price up $18 to $1009. Invs new low 312,150 tonnes

February 3 (Metal Bulletin) -- The tension in the zinc scrap
market remains as players hope the LME zinc price will continue
to strengthen. Scrap merchants described the market as
"frozen" as uncertainty remains over the future direction of
prices.

Consumers are wary of buying scrap, which they say is priced to
highly in comparison to the LME price, while suppliers say it
is still not worth their while releasing material at such low
prices. "The market really is in no man's land," one merchant
said.

One major merchant in Germany said that demand remains strong
for scrap there, despite the relatively high price against the
LME. German prices for high-grade dross are at 84-86% ($823-843
per tonne) of cash LME and 77-80% ($754-784 per tonne) of cash
LME for low-grade dross. Roofing scrap is available as high as
74% ($725 per tonne) of the lowest LME price. "These prices
are far too high. For example, two years ago high-grade dross
was available for 65-70% of the lowest LME price," the
merchant said.

European merchants are sourcing their material from wherever
they can. Zinc producers are also trying to get any quantity of
scrap at any price. Zinc scrap was in short supply throughout
Western Europe during January.

Ashes are said to be even harder to track down at the moment
and are going for 50-55% of the lowest LME value at $490-540
per tonne.

Another European merchant said that strong demand for all types
of scrap from India is adding to the difficulties of locating
material. "The Indians do not mind paying over the odds for
scrap. For me the problem is not the price of the material, it
is finding it. I too would pay more than the actual cost just
to get it to fulfil contracts with my clients. Its not going to
be any easier to get it this month as it is usually pretty hard
to source scrap in February," the merchant said.

European merchants also report that scrap trading in euros has
begun quietly but steadily. "A good deal of scrap consumers
wanted to get used to the new currency and have been happy to
trade in euros since it began. The good rate of exchange
between the euro and the dollar has been a help in this," a
merchant explained.

Metal Bulletin newsroom,
London Tel +44 171 827 9977
Fax +44 171 928 6892
New York Tel +1 212 213 6202
Fax +1 212 213 6273
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