Zinc alloy producers say market demand is on track to hold steady or rise in 2005, with prices likely to follow suit.

At home, manufacturers point to a strong housing market and an active automotive manufacturing sector as evidence for their rosy outlook. Looking abroad, they note that China is boosting its consumption while its inventories continue to drop. Many said they expect China to be a net importer of the metal this year.

One Midwest producer said zinc would soon become attractive to investors. "It's price has been depressed," he said. "It has been the worst-performing material and now it's playing catch-up."

In the U.S., most sources put special high-grade (SHG) zinc premiums at 4.25 to 4.75 cents a pound, although there were quotes on both sides of that range at 4 cents and 5 cents a pound.

Among the die-cast alloys, premiums for Nos. 3 and 7 were put at 11 to 11.5 cents a pound over the London Metal Exchange price, while those for No. 5 were 12 to 12.5 cents and No. 2 was 13 to 13.5 cents a pound.

For the zinc-aluminum foundry alloys, sources generally put premiums for No. 8 at 14 to 15.5 cents a pound, although quotes ranged from a low of 13.5 cents to a high of 16 cents a pound. Alloy No. 12 premiums were said to be 17.5 to 18 cents a pound, while No. 27 generally was around 25 to 26 cents a pound but ranged from 17 to 29 cents a pound.