US zinc scrap prices slid across some grades Thursday amid volatility on the LME and healthy supply of the metal.
The weekly Davis Index for new zinc diecast inched up by 0.3¢/lb to 73.8¢/lb delivered US consumer on stable demand for the grade. Galvanizer grades decreased for the third consecutive week, with the index for zinc galvanizers bottom dross dropping by 1.7¢/lb to 73.3¢/lb delivered US consumer. Zinc galvanizers top dross also fell by 1.5¢/lb to 69.5¢/lb delivered on Thursday.
Market participants expect the zinc scrap market to remain balanced because manufacturing and automotive volumes have grown, and the US economy is recovering faster than most observers anticipated.
The index for special high-grade zinc premium was flat at 8.5¢/lb under the three-month LME contract because zinc prices on the exchange are weak. However, premiums are expected to rise, especially in Europe where zinc demand has outpaced supply, according to some market participants.
Volatility in the LME Zinc market, which began in September, has persisted into this month. The market closed last week with a $66/mt decline to settle at $2,317/mt on Oct 2, but by Oct 6 it rebounded to $2,351.50/mt, and rose again to $2,377/mt on Oct 7. However, it declined again Thursday, with the three-month official LME Zinc contract settling at $2,373/mt, down by $10/mt from $2,383/mt on Oct 1.