Prices for US zinc scrap ticked up across most grades Thursday on improved demand and higher LME zinc prices.
The weekly Davis Index for new zinc diecast recovered some of last week’s losses, increasing by 0.7¢/lb to 78.7¢/lb delivered US consumer. The index for zinc galvanizers bottom dross climbed by 0.2¢/lb to 75.2¢/lb delivered US consumer, while zinc galvanizers top dross rose by 0.3¢/lb to 71.3¢/lb delivered.
However, the index for special high-grade zinc premium declined by 0.2¢/lb to 8.6¢/lb under the three-month LME contract, as supply improved amid rising LME zinc prices.
LME zinc surged again this week, with the three-month official LME zinc contract closing Thursday at $2,514/mt, up by $32.5/mt from $2,482/mt on August 27. The LME zinc market has risen by 43pc since mid-March when it hit a low of around $1,763/mt.
Strong export demand, especially to countries like China where steel demand and production are rising, has supported zinc scrap prices. The necessity for zinc, which is used as a galvanizer in the steelmaking process, has grown commensurately.
US steel mills have ramped up production, as reflected in the $20-40/gt price increases at the beginning of domestic ferrous trading on September 2. Ferrous scrap prices are expected to rise this month over last, with market participants anticipating better demand from steel mills. If that occurs, domestic zinc scrap prices could also strengthen.