Zinc alloy premiums continue to hold firm despite the typical year-end slowdown.

Premiums for alloys No. 3 and No. 7 remain in the 11.5- to 12-cent-a-pound range for spot business, depending on the destination. "I'd say it's around 11.5 cents if the customer is within 500 miles or so," one major diecaster told AMM. "But if they're beyond that then it's 12.5 cents."

Other producers agreed with the 11.5- to 12-cent premiums for alloys No. 3 and No. 7. Alloy No. 5 is selling a penny above that level, market participants said, although one diecaster said the markup should be greater given the current price of copper. "It should really be 1.25 cents above Nos. 3 and 7, but customers are used to it being a penny so that's what it is," he said.

Alloy No. 2 currently has a premium of 14.5 to 15 cents a pound, sources said.

Contract prices for 2005 are a little lower than spot levels, but much business still has to be completed for next year.

"When the (London Metal Exchange) zinc price dropped last week, people came in and bought for the first quarter," one alloy producer said. "But that just showed that no one has done their buying yet. There's a lot of pricing still to be done because the price moved up so quickly that people delayed their purchases."

A second alloy producer agreed that consumers have been slow to place their orders, but said some have booked part of their tonnage in case analysts' predictions of higher prices in 2005 prove correct.

"I had a couple of inquiries from customers looking for two trucks a month in 2004. They decided to get some of it (their requirements) booked just in case (the price goes up further)."

Where business is being done, premiums are a little lower than the spot prices, market participants said.

"They get shaved off a little, so for Nos. 3 and 7 you might not get 11 cents for '05 business," one of the alloy producers said.