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

US zinc alloy prices rose significantly across all grades, as automotive restarts across the country helped the market rebound.


The weekly Davis Index for Zamak #3 and Zamak #7 both increased by 9.2¢/lb to $1.143/lb delivered US consumer on Tuesday, while Zamak #2 and Zamak #5 rose by 8.2¢/lb and 8.7¢/lb to $1.173/lb delivered and $1.153/lb delivered, respectively.


The index for zinc alloys ZA 8, ZA 12, and ZA 27 also surged by 9.7¢/lb, 6.7¢/lb, and 8.3¢/lb to $1.193/lb delivered US consumer, $1.213/lb delivered, and $1.243/lb delivered, respectively.


Three factors have contributed to the current price surge, according to market participants: factory restarts should raise zinc demand in a tight supply environment; producers are factoring in short coverings on commodity trades; and freight costs to transport the material have increased.


LME zinc cash offers, which are used to determine spot prices for zinc alloys, have also risen over the past few weeks. Despite declining slightly since last week, market participants see the aggregated effect of upward movement in LME zinc cash. 


The official LME zinc cash offers closed Tuesday at $0.9149/lb, declining from $0.9156/lb on May 12. The official LME zinc three-month contract closed Tuesday at $2,016.5/mt, decreasing slightly from $2,019/mt on May 12.


However, some market participants have cautioned that the surge could be temporary, and they have adopted wait-and-see approaches, at least until the end of Q2 when prices are expected to normalize.

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