The prices for US zinc scrap inched up for some grades despite muted demand after LME Zinc surged during the week. 

 

The weekly Davis Index for zinc galvanizers bottom dross ticked up by 0.4¢/lb to 73.5¢/lb delivered US consumer. Zinc galvanizers top dross increased to a smaller extent, moving up by 0.2¢/lb to 70.5¢/lb on Thursday, while new zinc diecast gave away some of its previous gains, inching down by the same amount to 77.8¢/lb delivered.

 

LME zinc has continued its upward movement since early July and is estimated to have gained 30pc over the lows of below $1,700/mt seen in mid-March. This has made zinc the second base metal after copper to have peaked at previous highs before rising at a more sedate pace since last week. The three-month official LME zinc contract closed Thursday at $2,284/mt up by $70/mt from $2,214/mt on July 23. 

 

However, plenty of supply has market participants worried about the long-term prices of the metal. Recent reports indicate an abundance of zinc stocks in LME warehouses even though demand remains weak as zinc concentrate suppliers, one of the key buyers of zinc, struggle to revive sales after COVID-19 related lockdowns in the global market.

 

Domestic demand in the US surged after manufacturing and automotive industries restarted operations in June but have slowed down since then, keeping domestic prices for zinc scrap moving at a slower pace than previously anticipated by sellers. According to some market participants, buyers are also reluctant to stock up on material, fearing another potential round of shutdowns as COVID-19 cases rise across the US, keeping prices under pressure. 

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