The Davis Index for US zinc secondary alloys increased by 2-3¢/lb across most grades on Tuesday amid increasing demand and manufacturing industries ramping up their operations.
The weekly Davis Index for Zamak #2 rose by 3¢/lb to $1.153/lb delivered US consumer. The index for Zamak #3, Zamak #5, and Zamak #7 all increased by 2.5-2.8¢/lb to $1.123/lb delivered US consumer, $1.135/lb delivered, and $1.123/lb delivered, respectively.
The index for zinc alloys also ticked up on Tuesday. The Davis Index for ZA 12 increased by 2.7¢/lb to $1.192/lb delivered and increased for ZA 27 by 1.6¢/lb to $1.201/lb delivered. The index for ZA 8, however, saw the smallest movement of all grades, rising by 0.3¢/lb to $1.148/lb delivered US consumer on Tuesday.
The official LME zinc cash offers, which are used to calculate zinc alloy prices, closed Tuesday at $0.9328/lb up from $0.9308/lb on June 23. The official three-month LME zinc contract also closed Tuesday at $2,067/mt, increasing by $9.50/mt from $2,057.50/mt on June 23.
Zinc alloys producers anticipate demand will normalize to the pre-pandemic levels by the end of Q3 2020, provided there isn’t a second round of lockdowns. COVID-19 cases in the US have surged again and caused many states to rethink their reopening strategies.
States like Texas and Arizona have already ordered bars to shut down and have restricted recreational activities. However, these closures, market participants believe, will have little effect on zinc alloy demand, which is expected to rise steadily as manufacturing won’t be affected by the recent shutdowns.