Prices for secondary zinc alloys declined by around 4¢/lb on weak demand from the automotive sector and volatility in the spot market.
Weekly LME Zinc prices declined with the official LME Zinc cash price settling Tuesday at $2,965/mt $3,002.50/mt ($1.3449/lb) down by $37.50/mt from Aug 17.
The fluctuations in LME Zinc prices, as well as US currency, have impacted spot deals as more buyers prefer to wait for prices to stabilize or hunt for bargains. On their part, producers are hard-pressed to sell at lower prices as raw material prices remain high. Long-term business contracts remain positive though weakness in the automotive sector due to the chip shortage is likely to put some downward pressure on prices in the short term.
The weekly Davis Index for Zamak #2 decreased by 4.2¢/lb to $1.573/lb delivered US consumer. Zamak #5 declined by the same amount to $1.553/lb delivered while both Zamak #3 and #7 fell likewise to $1.533/lb delivered.
ZA 27 moved down by 4.5¢/lb to $1.683/lb delivered, while ZA 8 dropped by 4.2¢/lb to $1.583/lb delivered and ZA 12 decreased by the same amount to $1.613/lb delivered US consumer.
Producers remain optimistic about the long-term fundamentals of the market. Special high grade (SHG) zinc premiums are expected to rise towards the end of the year, especially if the market remains in deficit as reported by the World Bureau of Metal Statistics (WBMS) on Aug 23. A rise in zinc premiums could also put upward pressure on zinc alloy prices in the long term.