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

US zinc secondary alloy prices surrendered last week’s gains to decline by 6-7¢/lb on Tuesday following LME zinc prices plunging.


LME zinc closed at a low of $2,463.50/mt on September 4, and continued slipping Tuesday after Labor Day weekend. The official LME zinc cash offers closed Tuesday at $1.100/lb, decreasing from $1.158/lb on September 1, while the official three-month LME zinc contract slipped by $124.50/mt to close at $2,453/mt on Tuesday from $2,577.50/mt on September 1. Market participants are optimistic about medium-term LME trends, but anticipate LME zinc prices dropping to $2,350/mt before subsequently rising.


The weekly Davis Index for US secondary zinc alloys decreased by 6-7¢/lb for most Zamak grades. The index for Zamak #2 fell by 7¢/lb to $1.31/lb delivered US consumer on Tuesday. Zamak #3 and Zamak #7 both declined by 6¢/lb to $1.28/lb delivered, while Zamak #5 slipped by 7¢/lb to $1.295/lb delivered.


The zinc alloy indexes also fell, although not by as much as the Zamak grades. The indices for both ZA 8 and ZA 27 decreased by 6¢/lb to $1.33/lb delivered US consumer and $1.37/lb delivered, respectively, on Tuesday. Of all zinc alloys grades, ZA 12 declined the least, with the Davis Index dropping by 2¢/lb to $1.35/lb.


Producers view the current decline as a temporary setback caused by the LME zinc market, as demand for zinc alloys remains solid as more alloys production returns to the US from China.. However, some producers are concerned about the market uncertainty created by the COVID-19 pandemic, ongoing civil unrest in the US, and the country’s presidential election in fewer than 55 days.

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