Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

US zinc secondary alloys prices moved up by around 5-6¢/lb on Tuesday, continuing an uptrend that began in July when LME zinc started surging. 


LME zinc and LME warehouse inventories have kept climbing. In fact, LME zinc has increased by 35pc since its mid-March lows. The official LME zinc cash offers closed Tuesday at $1.0755/lb, rising slightly from $1.0451 on August 4, while the official three-month LME zinc contract rose by $73.50/mt to close Tuesday at $2,388.50/mt from $2,315/mt on August 4.


The weekly Davis Index increased by about 5-6¢/lb for all Zamak grades. The index for Zamak #2 climbed by 6¢/lb to $1.303/lb delivered US consumer on Tuesday, while Zamak #5, which rose at a slightly slower pace, increased by 5.6¢/lb to $1.286/lb delivered. Zamak #3 and Zamak #7 both rose by 4.8¢/lb to $1.266/lb delivered on Tuesday.


The indexes for zinc alloys also surged by 5-6¢/lb, with ZA27 rising faster than all other alloy grades. The Davis Index for the material increased by 6.3¢/lb to $1.366/lb delivered US consumer on Tuesday, while ZA 12 rose by 5.3¢/lb to $1.33/lb delivered, and ZA8 increased by 5.2¢/lb to $1.310/lb delivered.


Apart from the LME surge, zinc alloy prices have also been riding the coattails of higher copper prices, according to some market participants. Other producers put down the increases to rising in demand and inquiries for different alloy grades from customers. 


However, alloy consumers are giving mixed signals because of doubtfulness that zinc alloy prices can sustain their rise. As a result, some producers expect a correction to more justifiable levels soon.


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