The Davis Index for US zinc secondary alloys declined by around a penny across most grades in a quiet Tuesday market, as automotive sales slowed down.
The weekly Davis Index for Zamak #2 decreased by 1.1¢/lb to $1.142/lb delivered US consumer. The index for Zamak #3, Zamak #5, and Zamak #7 all decreased by 0.8-1.1¢/lb to $1.112/lb delivered US consumer, $1.127/lb delivered, and $1.112/lb delivered, respectively.
The indices for zinc alloys ticked up for ZA 8 and ZA 27 but fell by a penny for ZA 12 to $1.182/lb on Tuesday. The Davis Index for ZA 8 increased by 1.4¢/lb to $1.162/lb delivered and increased for ZA 27 by one-tenth of a penny to $1.202/lb delivered.
The official LME zinc cash offers, which are used to calculate zinc alloy prices, closed Tuesday at $0.9242/lb, decreasing from $0.9328/lb on June 30. The official three-month LME zinc contract also closed Tuesday at $2,048/mt, declining by $19/mt from $2,067/mt on June 30.
The initial excitement and increase in demand after the automotive sector resumed operations in late-May and early-June has given way to sluggish sales as automotive dealerships have suspend activities amid a surge in COVID-19 infections across the US. However, some producers believe that, despite these closures, demand remains strong and will pick up again once they reopen for business.
Apart from automotive, zinc alloys are used in the construction sector where demand continues to outpace supply, and alloy producers are confident that, despite the current economic deceleration, the construction sector will remain a silver lining as more people look to suburbs to get away from high prices and increased COVID-19 risks in big cities.