US zinc secondary alloys prices surged by 4-5¢/lb on Tuesday amid increasing demand and the rising LME zinc market.
LME zinc continued to move up on positive global and domestic cues for the metal. The official LME zinc cash offers closed Tuesday at $1.158/lb, climbing from $1.1167/lb on August 25, while the official three-month LME zinc contract rose by $87.50/mt to close at $2,577.50/mt on Tuesday from $2,490/mt on August 25.
Market participants expect the LME zinc market to trend higher over the next few weeks, and some anticipate it could reach $2,600/mt in the short term.
The weekly Davis Index climbed 4-5¢/lb for most Zamak grades. The index for Zamak #2 rose by 5¢/lb to $1.376/lb delivered US consumer on Tuesday. Zamak #3, Zamak #5, and Zamak #7 all rose by 4¢/lb to $1.345/lb delivered, $1.36/lb delivered, and $1.345/lb delivered, respectively.
The weekly indexes for zinc alloys also moved up by 4¢/lb for ZA 8 and ZA 27, but was unchanged at $1.37/lb delivered for ZA 12. The indices for ZA 8 and ZA 27 climbed to $1.391/lb delivered US consumer and $1.427/lb delivered, respectively, on Tuesday.
Zinc alloy prices rallied this week after some steelmakers, like Big River, US Steel, and Steel Dynamics, announced hikes in zinc coating extras last week. This, along with the increase in LME zinc, which has climbed by 43pc since hitting a multi-year low of $1,763/mt in mid-March, has raised zinc alloy prices across most grades.
Producers are seeing strengthening order books because zinc alloy demand, especially from the automotive sector, is improving. However, the outlook for the next quarter is foggy; market participants are relying on the results of the upcoming US presidential election to gauge the market.