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

US zinc scrap prices dropped on Thursday in tandem with a decrease in LME Zinc prices despite robust demand. 


The three-month official LME zinc contract declined today to close at $2,985/mt down by $77/mt from May 27. LME Zinc had breached the $3,000/mt mark for the second time in a month last week and had trended up to as much as $3,080/mt earlier this week before dropping to its current levels. 


Demand for zinc scrap has remained robust, especially for dross grades amid a strong steel market with the 1-2¢/lb drop in zinc galvanizers bottom dross and top dross being attributed to the fall in LME rather than any changes in supply and demand for these grades.


The weekly Davis Index for zinc galvanizers bottom dross declined by 0.5¢/lb to 87.3¢/lb delivered US consumer while zinc galvanizers top dross fell by 2.4¢/lb to 85.8¢/lb delivered. 


New zinc diecast remained unchanged at 89.5¢/lb delivered US consumer as the supply for this grade continued to remain limited. Offers for this material firmed up to 90-91¢/lb though no deals were confirmed at those levels.


In the primary market, the Davis Index special high-grade (SHG) zinc premium was unchanged at 8.5¢/lb delivered. SHG zinc remains in tight supply globally. 


The latest power outages in Yunnan, which have forced zinc smelters in that region to reduce production, are expected to impact around 1.2mn mt of zinc smelting capacity in China, the world’s largest zinc producing and consuming country. Moreover, refined zinc production from mines has been slow to recover from the COVID-19 pandemic, tightening the primary zinc supply further. Together, these factors are likely to put upward pressure on zinc prices, which in turn, could lift the premium further.

Leave a Reply

Your email address will not be published.