Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

US zinc secondary alloys prices inched down on Tuesday in tandem with falling LME Zinc prices. 


The official LME Zinc cash offers closed Tuesday at $1.2651 slightly lower than $1.2778/lb last week, while the official three-month LME Zinc contract inched down by $26.50/mt from last week, closing Tuesday at $2,822/mt from $2,848.50/mt on Dec 15.


Elevated zinc alloys prices continue to impact the market, despite the slight correction witnessed on Tuesday. With the Christmas holidays starting this week, participants expect the market to remain quiet until the end of the year.


Producers expect demand to bounce back in a couple of weeks, especially in the automotive sector, a key consumer of zinc alloys, which has remained robust throughout this quarter. With COVID-19 vaccines now available and being administered in the US, producer sentiment is cautiously optimistic despite the rising COVID-19 cases and a new strain of the virus that has led to strict lockdown measures in the UK and some other European countries. 


The weekly Davis Index for Zamak #2 saw the least decline of all grades, dropping by 0.7¢/lb to $1.488/lb delivered US consumer. Zamak #5 fell by 0.8¢/lb to $1.475/lb delivered while both Zamak #3 and Zamak #7 declined by the same amount to $1.46/lb delivered on Tuesday.


The index for ZA grades saw higher declines than the Zamak ones. ZA 8 decreased by a penny to $1.507/lb delivered US consumer, while ZA12 dropped by 0.9¢/lb to $1.53/lb delivered. ZA 27 saw the highest fall of all grades, decreasing by 1.2¢/lb to $1.548/lb delivered US consumer.


Some market participants anticipate consumer purchases to pick up after the Christmas holidays if prices inch down again, while others expect transactions to rise despite higher rates, given the vibrant outlook for the steel industry and the US economy in Q1 and Q2 2021.

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