Steel Products Prices North America

Zinc Prices Manipulated Since 2010?
Written by John Packard
May 27, 2014
There are questions about potential manipulations of zinc and zinc trading which may have artificially inflated the metal’s price since 2010. Zinc, which is the metal used to coat galvanized steel as well as Galvalume, Galfan and ZAM, is believed to have been manipulated by The London Metal Exchange, Goldman Sachs, JP Morgan, Glencore Xstrata and its Pacorini Metals USA LLC unit and Metro International Trade Services, the metal warehousing of Goldman Sachs.
In a lawsuit filed on Friday in the Southern District of New York, is similar to one filed previously related to the manipulation of the aluminum market in the United States.
The basics of the lawsuit claims the companies manipulated LME rules to make sure that there were long waits for the release do zinc from warehouses. The companies are also accused of shuttling the metal between warehouses for no reason other than to, “cause and exacerbate anticompetitive effects.”
The impact of these actions have caused zinc prices to soar with galvanizing mills being hit the hardest through the premiums they have to pay in order to get delivery of the metal (approximately $0.10 per pound on top of the spot price).
According to a TodayOnline.com article, the London Metal Exchange warehouses in New Orleans hold 80 percent of the zinc in the exchange-registered stockpile. The article identifies Pacorini as operating most of the warehouses in New Orleans.
The lawsuit was filed by Duncan Galvanizing Corporation of Everett, Massachusetts and seeks class action status.
There was no trading of zinc on the LME on Monday. As of the end of this past week the zinc spot price was trading at $0.9438 per pound. This is at the higher end of the range over the past 6 months when zinc traded from $0.84 to $0.97 per pound.
John Packard
Read more from John PackardLatest in Steel Products Prices North America
BREAKING NEWS: NLMK USA up $50/ton on HR and CR, up $100/ton on coated
NLMK USA plans to increase prices for hot-rolled and cold-rolled coil by at least $50 per short ton (st). The move is effective immediately for all spot orders, the steelmaker said in a letter to customers on Friday.
SMU Price Ranges: Sheet floor holds as market debates upside
Our average HR coil price increased $5/short ton from last week, marking a second consecutive week of modest gains. Market participants generally attributed the increase to...
Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.
SMU Price Ranges: HR crawls back to $800/ton
SMU’s HR price stands at $800/st on average, up $5/st from last week. The modest gain came as the low end of our range firmed, and despite the high end of our range declining slightly.
SMU successfully completes IOSCO review
SMU has successfully completed an external review of all our prices. The review has concluded that they algin with principles set by the International Organization of Securities Commissions (IOSCO).
