European zinc premiums reach new high; Chinese, US markets hold

Premiums for special high grade (SHG) zinc ingot in Europe reached new record highs on Tuesday August 30 because of concerns over supply disruptions, while those in China and the United States held steady amid illiquid spot trading conditions.

Northern Europe

Physical spot premiums for refined SHG zinc ingot in Northern Europe have reached fresh record highs as uncertainty within the European market grows amid soaring energy costs.

Fastmarkets assessed the zinc SHG min 99.995% ingot premium, dp fca Rotterdam, and the zinc SHG min 99.995% ingot premium, dp fca Antwerp, at $500-530 per tonne on Tuesday, both up by $10-50 per tonne from $450-520 per tonne a week earlier.

The acutely tight supply situation within Europe, doubled with rising concerns around energy underpin the move higher in premiums as participants find available units more difficult to come by.

“All of our units are completely allocated now,” a trader told Fastmarkets.

“If you try to purchase units at the moment, most say that they are not offering and those that are will not accept below $500 [per tonne],” a second market source said.

Supporting this sentiment, no participants provided indications below $500 per tonne, with some assessing as high as $550 per tonne. But a lack of confirmed liquidity at this level prevented any further increase for now.

Despite these supply fears, many within the market also raised concerns over potential demand destruction from consumers, with some traders reporting they are already starting to see order postponements from both the alloy and galvanized steel sectors.

“It seems as if people are just buying time at the moment, they would rather pay the backwardation and rent than take the units,” a second trader said.

The London Metal Exchange zinc cash-to-three-month spread was recently at a $80.25 per tonne backwardation and has remained in steep backwardation for several months now.

But the supply concerns once again play a factor in this, with some traders noting that in previous years they would typically sell on the postponed units to cover these costs as they were confident, they could purchase replacement units in time for delivery. Now, this is not the case, with no available units in the region participants are forced to tightly hold onto material.

China

Fastmarkets assessed the zinc SHG min 99.995% ingot premium, cif Shanghai, and the zinc min 99.995% ingot premium, in-whs Shanghai, at $80-90 per tonne on Tuesday amid persistent import losses. Both premiums have been unchanged at this level since December 14, 2021.

“The export window is nearly open; many traders are closely eyeing it. But there are limited availabilities to do exporting, since local stock levels are low,” a Shanghai-based trader.

Fastmarkets’ calculation of the zinc import arbitrage stood at a loss of $446.84 per tonne on Tuesday, compared with a loss of $410.55 per tonne a week earlier.

Zinc inventories in Shanghai Futures Exchange warehouses fell to 90,288 tonnes on August 26, down by 5,918 tonnes from the previous week.

“Although domestic demand remains sluggish, continuous destocking due to maintenance at smelters has underpinned prices, and the supply front is expected to stay tight till year-end,” a second Shanghai-based trader said.

United States

Fastmarkets assessed the zinc SHG min 99.995% ingot premium, ddp Midwest US, at 35-40 cents per lb on Tuesday, unchanged from a week earlier.

The stability in the US zinc premium comes after a mid-month decline to the current level that saw the premium slide by 8.54% from 37-45 cents per lb on August 16.

The spot market continued to be reported as quiet, with some market participants attributing this to the summer lull.

“Some plants have been shutting down for maintenance, which has shown in the spot market,” a US supplier source said.

In addition to the slowed summer market, economic uncertainty and recession fears have resulted in a more cautious buying attitude.

“With the current economic uncertainty and the economy in a recession, we are seeing buyers exercising a bit more hesitation to enter the spot market,” a second US supplier source said.

Market participants expect these factors will continue to suppress the spot market and keep premium levels flat over the near term.

What to read next
Fastmarkets has launched MB-NI-0257, high-grade nickel matte payable indicator, 65-75% nickel contained, cif China, % of official exchange price on Friday May 30.
The following price was affected: MB-AL-0020 Aluminium P1020A premium, ddp Midwest US, US cents/lb.  This price is a part of the Fastmarkets Base Metals package. For more information or to provide feedback on the delayed publication of this price or if you would like to provide price information by becoming a data submitter to this price, please […]
The US aluminium industry is experiencing challenges related to tariffs, which have contributed to higher prices and premiums, raising questions about potential impacts on demand. Alcoa's CEO has noted that sustained high prices could affect the domestic market. While trade agreements might provide some relief, analysts expect premiums to remain elevated in the near term. However, aluminum demand is projected to grow over the long term, supported by the energy transition and clean energy projects. To meet this demand, the industry will need to increase production, restart idle smelters and address factors such as electricity costs and global competition.
Read Fastmarkets' monthly base metals market for May 2025 focusing on raw materials including copper, nickel aluminium, lead, zinc and tin.
The Mexico Metals Outlook 2025 conference explored challenges and opportunities in the steel, aluminum and scrap markets, focusing on tariffs, nearshoring, capacity growth and global trends.
China has launched a coordinated crackdown on the illegal export of strategic minerals under export control, such as antimony, gallium, germanium, tungsten and rare earths, the country’s Ministry of Commerce announced on Friday May 9.