The prices for US zinc scrap declined for the second consecutive week, driven by drops in LME Zinc pricing as well as many buyers and suppliers shutting down for the New Year holiday in the US.
The LME Zinc market has steadily declined over the past two weeks with the three-month official LME Zinc contract closing on Thursday at $2,745.50/mt down by $58/mt from $2,803.50/mt on Dec 23.
The persistent decline in LME Zinc has caused galvanizer grades to drop again by 1-1.5¢/lb despite a strong outlook for the grades in January. As a result, the weekly Davis Index for zinc galvanizers bottom dross fell by 1.2¢/lb to 76.7¢/lb delivered US consumer. Zinc galvanizers top dross declined by 1.5¢/lb to 73.8¢/lb delivered.
Strong potential trades in the domestic ferrous market in January are expected to raise galvanizer prices too with more steelmakers looking to buy dross.
The weekly Davis Index for new zinc diecast also inched down by 0.7¢/lb to 80¢/lb delivered US consumer, while special high-grade zinc premiums, remained at 8¢/lb under the three-month LME Zinc contract.
Zinc scrap prices are expected to rise once the market resumes activities after the Christmas and New Year holidays in the US. Market participants have enjoyed robust demand from the steel and automobile industries through most of the second half of the year and expect this trend to continue into the first quarter of 2021 as well.