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

The prices of most US zinc scrap grades decreased on Thursday, in line with a persistent trend in the LME Zinc market through most of last month. 


The weekly Davis Index for new zinc diecast ticked down by 0.8¢/lb to 73.5¢/lb delivered US consumer, while the galvanizer grades decreased by a penny on balanced supply and demand. Zinc galvanizers bottom dross dropped to 75¢/lb delivered US consumer, and zinc galvanizers top dross fell to 71¢/lb delivered on Thursday.


The index for special high-grade zinc premium, which declined by 0.1¢/lb last week, remained at 8.5¢/lb under the three-month LME contract amid weak LME Zinc prices.


The LME Zinc market has been volatile throughout September, with declines recorded in three out of four weeks. In fact, LME Zinc prices declined again this week, as the three-month official contract closed Thursday at $2,383/mt, decreasing by $8.50/mt from $2,391.50/mt on Sep 24. 


Zinc market participants have adopted a wait-and-see approach, even amid stable movement of the material. Prices, according to buyers and sellers, are being dictated by macroeconomic factors and persistent declines in the LME Zinc market, rather than by supply and demand fluctuations. Moreover, the primary zinc market is beset by tight ore supply, although that should change soon because the San Cristobal mine in Bolivia resumed production this week.


In the US, the latest manufacturing data for September pointed to moderate growth after spiking in August. The latest ISM manufacturing index slipped to 55.4 in September, led by contractions in the primary metals, apparel, printing, and petroleum markets. However, new orders and production in the manufacturing industry at large have continued growing, and some market participants are hopeful for a better October market.


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