The weekly Davis Index for US secondary zinc alloys fell by 5-7¢/lb on Tuesday due to a steep fall in LME Zinc cash prices during the week.
The Davis Index for Zamak #3 declined by 7¢/lb to $1.18/lb, as did the Index for Zamak #7, which decreased to $1.23/lb on Tuesday. The Index for Zamak #2 and Zamak #5 also fell by 6¢/lb to $1.24/lb and $1.21/lb, respectively.
The Davis Index for ZA#12, ZA#27, and ZA#8 decreased by 5-6¢/lb to $1.17/lb, $1.18/lb, and $1.19/lb, respectively.
Zinc alloy prices are based off the LME zinc cash contract, which declined sharply from $1.0401/lb on Jan 27 to $1.0058/lb at the end of trade on Tuesday. Market participants believe the price decline is the result of the coronavirus’s impact in China, which is one of the largest zinc consumers and suppliers.
Chinese processors and downstream zinc consumers aren’t expected to resume working before Feb 9, likely impacting the metal’s supply and demand in one of the world’s largest zinc markets.
Chinese zinc smelters have felt the outbreak’s impact as low consumption has caused their refined zinc inventories to grow. These factors have also impacted the three-month official LME zinc contract, which closed Tuesday at $2,212/mt, down by $42/mt from $2,254/mt last week.