The prices for US zinc scrap increased by 2-5¢/lb on Thursday amid a significant weekly rise in the LME Zinc market and on concerns over a potential lack of supply.
The LME Zinc market surged again with the three-month official LME Zinc contract closing on Thursday at $ 2,726.50/mt up by $118/mt from $ 2,608.50/mt on Nov 12, as global supply began tightening.
The weekly Davis Index for new zinc diecast increased by 1.8¢/lb to 76.3¢/lb delivered US consumer. Prices for both the dross grades rose amid ongoing annual contract negotiations with steelmakers. The index for galvanizers bottom dross increased by 2.6¢/lb to 77.7¢/lb delivered US consumer, while galvanizers top dross surged by 4.9¢/lb to 77.9¢/lb delivered after remaining flat last week.
Closure of the Gamsberg zinc mine in South Africa this week is likely to put pressure on supply thus raising the LME Zinc and zinc scrap prices. Moreover, reports suggest that supply tightness could continue until the end of the year unless the zinc mine restarts operations earlier than planned.
Market participants in the US expect SHG zinc premiums to remain flat through the rest of this year as they try to gauge the policies of the incoming administration amid a hotly contested US presidential election. Thus, the index for special high-grade zinc premium was flat at 8.5¢/lb under the three-month LME Zinc contract on Thursday.