S&P Global Platts assessed the European duty-paid SHG zinc monthly premium at $125-$140/mt plus LME cash in-warehouse Rotterdam on Wednesday.
That was unchanged from last month as most deals were done within those levels and, despite slower summer spot activity, most market participants said demand was steady.
"Demand is quite good," a trader said, adding: "July is not like May or June but demand is better than last year."
He reported deals for SHG duty-paid metal close to $150/mt plus LME FCA Rotterdam, normalized to around $135-$140/mt plus LME cash in-warehouse Rotterdam.
A second trader reported deals of 100-500 mt SHG duty-paid metal at $140-$145/mt plus LME cash FCA Rotterdam for prompt delivery, normalized to around $125-$135/mt plus LME cash in-warehouse Rotterdam.
A third trader, who reported offering SHG duty-paid metal at $145/mt plus LME cash FCA Rotterdam, normalized to around $130-$135/mt plus LME cash in-warehouse Rotterdam, said the market was trading closer to $140/mt plus LME cash FCA Rotterdam.
A fourth trader said he saw the market for SHG duty-paid metal trading at $140-$150/mt plus LME cash FCA Rotterdam.
On warehousing, zinc stocks in New Orleans warehouses have fallen 33.3% since the beginning of the year, standing at 253,525 mt as of July 19.
Net cancellations in New Orleans have risen steadily over recent months, and were at 119,700 mt Wednesday.
"A portion of the canceled warrants came back in New Orleans warehouse as the arbitrage with China has closed and there is no liquidity," the third trader said.
In June, the arbitrage opportunity between SHFE and LME prices saw metal moving from LME-registered warehouses in New Orleans to Asia.
Premiums in Asia had also picked up with some market participants saying they saw deals done up to a $220/mt premium plus LME cash, ex-works Shanghai.
However, premiums have eased this month with sources reporting thin trading and premiums at around $150/mt, same basis.
"A lot of the canceled metal went to China," the fourth trader said, adding: "There is no reason to move metal between warehouses or off-warrant as the spreads are in backwardation, so why store old LME material?"
Indeed, the cash-August spread was at a $5/mt backwardation last Friday, but as of Tuesday the spread stood at a $3/mt contango.
On the London Metal Exchange, the official cash price settled at $2,761/mt on Wednesday.
