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

US zinc secondary alloy prices increased by 2-6¢/lb on Tuesday after LME Zinc surged during the week to recoup some of last month’s losses. 


The official LME zinc cash offers closed Tuesday at $1.1013/lb, increasing from $1.0573/lb on Oct 6, while the official three-month LME zinc contract rose by $95.50/mt from last week, closing Tuesday at $2,446.50/mt from $2,351/mt on Oct 6.


The LME zinc market, following other base metals, rose in anticipation of the economic stimulus bill under discussion in the US Senate, as well as the latest round of investment announced in China. The domestic market is optimistic about the prospects for zinc alloys, which appear robust in light of strong demand from the automotive industry, where production is nearing pre-pandemic levels. 


The weekly Davis Index for Zamak #2 rose by 4.9¢/lb to $1.321/lb delivered US consumer, while Zamak #5 increased by 5.1¢/lb to $1.308/lb delivered. The indexes for both Zamak #3 and Zamak #7 climbed by 5¢/lb to $1.291/lb delivered on Tuesday.


The Davis Index for ZA 12 rose the least of all grades, climbing by 2.1¢/lb to $1.361/lb delivered US consumer, while ZA 27 increased by 5.9¢/lb to $1.371/lb delivered on Tuesday. The Davis Index for ZA 8 rose by 4.9¢/lb to $1.341/lb delivered.


Market participants expect the current rate of economic recovery to continue, although it remains to be seen whether a new administration after next month’s US presidential election can accelerate the process, especially since negotiations to stimulate the economy have stalled. Nevertheless, new legislation to bring manufacturing jobs back from China, if passed, would further brighten the outlook for the zinc alloy market, according to some market participants. 


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