US zinc secondary alloys prices continued their uptrend with most grades rising by 1.5-2.5¢/lb on Tuesday as the market continued to see mild improvement and LME zinc prices strengthened further.
The official LME zinc cash offers touched a dollar on Tuesday closing at $1.003/lb up from $0.9922/lb on July 14. The official three-month LME zinc contract closed slightly below its highest point since February of $2,223/mt, achieved on July 13, to settle at $2,218/mt up by $19.50/mt from $2,198.50 on July 14.
The weekly Davis Index for all Zamak grades climbed by 1.5¢/lb with Zamak #2 increasing to $1.227/lb delivered US consumer. The index for Zamak #3, Zamak #5, and Zamak #7 rose to $1.197/lb delivered US consumer, $1.212/lb delivered, and $1.197/lb delivered, respectively.
The indexes for zinc alloys ticked up for ZA 27 by 2.5¢/lb to $1.287/lb and rose for ZA 8 and ZA 12 by 1.5¢/lb to $1.247/lb and $1.267/lb, respectively.
The market for zinc alloys has improved considerably in July as more industries restart operations. The progress in demand, however, has been slower than expected due to the uncertainty around the rise of COVID-19 cases across the US, which is resulting in a start-stop-start situation across industries, according to some alloy producers.
Moreover, customers and producers are wary about the sustainability of the current LME zinc rally, which has caused zinc alloy prices to rise significantly over the past few weeks though, as a producer pointed out, reluctant buyers are emerging as the broader manufacturing indicators remain strong.