Prices for US zinc scrap ticked up for some grades, and held for others, amid higher LME zinc prices and improving demand.
The weekly Davis Index for new zinc diecast rose by a penny to 77¢/lb delivered US consumer on Thursday. The index for zinc galvanizers bottom dross also increased by 0.3¢/lb to 73¢/lb delivered, but held for zinc galvanizers top dross at 69.8¢/lb delivered.
Last week, LME zinc had one of its strongest runs since March, which also contributed to rising prices for the material. The three-month official LME zinc contract closed Thursday at $2,145/mt, up by $96/mt from $2,049/mt on July 2, with market participants expecting it to climb towards $2,190/mt.
The index for special high-grade zinc premium, however, was flat at 8.5¢/lb delivered, under the three-month LME contract amid supply concerns over primary zinc after shipments from Alaska’s Red Dog mine were delayed.
COVID-19-related mining lockdowns across the globe have resulted in a dearth of primary zinc supply, reducing it by almost half, according to data. With mines resuming operations, however, supply issues are likely to dissipate in spite of the uncertainty surrounding rising COVID-19 infections in South America, where many of the zinc mines are located.
Domestic zinc scrap prices continued inching up, albeit slowly, because of resistance from the automotive sector, which has yet to reach 2019 production and sales levels after demand initially surged in late-May upon activities resuming.