US zinc secondary alloy prices continued moving south in a week dominated by political news and falling LME zinc inventories.
Market participants, who eyed macroeconomic trends last week, have become optimistic about curbing sliding zinc prices that began last month. Despite this week’s declines, zinc alloy prices have stabilized, according to one producer, and they’re likely to rise in the near term.
The market is also closely watching the US presidential election since its outcome could affect business—in the interim, though, business across the country is improving in tandem with a reopening economy. Manufacturers are also looking forward to new legislation to bring jobs from China back to the US, which, according to a Midwest producer, “will certainly brighten the outlook” for zinc alloys.
The weekly Davis Indexes for Zamak #2 and Zamak #5 decreased by 3.3¢/lb to $1.272/lb delivered US consumer and $1.257/lb delivered, respectively. The indexes for both Zamak #3 and Zamak #7 declined by 3.4¢/lb to $1.241/lb delivered on Tuesday.
The Davis Index for ZA 8 fell by 3.3¢/lb to $1.292/lb delivered, while ZA 12 saw the smallest drop of all grades, falling by half a penny to $1.34/lb delivered. However, the index for ZA 27 fell the most, decreasing by 5.3¢/lb to $1.312/lb delivered.
The official LME Zinc cash offers closed Tuesday at $1.0573/lb, declining from $1.0968/lb on Sep 29, while the official three-month LME zinc contract declined by $78.50/mt from last week, closing Tuesday at $2,351/mt from $2,429.50/mt on Sep 29.
The trend of LME Zinc declines seems to be petering, but according to some market participants, supply of the metal is likely to rise short-term with many mines increasing production, which could result in downward pressure on premiums.