Prices for zinc alloys trended sideways on concerns over supply chain issues such as high freight and raw material costs, despite strong demand.
LME Zinc prices continued to trend up during the week with the official LME Zinc cash price settling Tuesday at $2,970/mt ($1.3473/lb) up by $8/mt from Jul 27.
Demand persists in the zinc alloys market, though freight and raw material costs continue to impact producers who are unable to increase their margins despite the higher rates. The revival of the automotive industry seems to be a silver lining with more orders expected from this market. However, some participants believe the chip shortage may present issues moving forward, a sentiment shared by European carmakers BMW and Stellantis who published their H1 2021 earnings today.
The weekly Davis Index for Zamak #2 fell by 0.4¢/lb to $1.59/lb delivered US consumers. Zamak #5 dropped by 0.6¢/lb to $1.57/lb delivered while both Zamak #3 and #7 declined by the same amount to settle at $1.55/lb delivered.
All the ZA grades inched down by 0.1¢/lb, with ZA 8, ZA 12, and ZA 27 settling at $1.60/lb delivered $1.63/lb, and $1.70/lb delivered US consumer, respectively.
Differing opinions about the impact of the Delta variant have caused some market uncertainty with some participants saying that the rise will not lead to a fresh round of shutdowns while others are not so sure. The deteriorating trucking situation is also raising some concerns as it may result in long lead times and the potential for production slowdown in various industries.