Bank of America Merrill Lynch: Zinc Could Become the New Copper

Platts reported that US zinc market players have reported slow business this week, noting that premiums for the metal on both the east and west coasts are uniformly high. Separately, in a report released this week, the Bank of America Merrill Lynch said zinc may become “the new copper.”

As quoted in the market news:

An alloyer in the Western US said he hadn’t made any spot purchases this week, but said he was quoted from sellers of special high-grade zinc “anywhere between 9 and 9.5 cents” plus LME cash.

A zinc trader put current SHG premiums at 8.5-9 cents and said current demand levels are mixed, with some customers reporting weak orders, while others say they anticipate the warmer temperatures will bring a surge in sales-enhancing construction activity.

Another trader said his selling range is 9-11 cents, but said most of his transactions this week were closer to 11 cents. The trader said that, if customers can wait for material beyond a week or so, they might secure a premium nearer to 9 cents.

The Bank of America Merrill Lynch said:

Investment in zinc mines has not been sufficient to prevent continued declines of surpluses in recent years. This is unlikely to change until projects like Ivanplat’s Kipushi site come online later in the decade. Hence, we believe zinc could become the new copper.

Click here to read the full Platts report.