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

US zinc secondary alloy prices fell for a second consecutive week in a volatile market that’s moving in either direction because of domestic and global macroeconomic trends.


The official LME Zinc cash offer closed Tuesday at $1.0968/lb, declining from $1.1213/lb on September 22. The official three-month LME Zinc contract closed Tuesday at $2,429.50/mt, declining by $60.50/mt from $2,490/mt on September 22. 


Market participants are intently watching LME Zinc, which has declined three of four weeks this month. However, with strong market fundamentals, some expect LME Zinc prices to rebound to August levels of around $2,500/mt. 


The weekly Davis Index for Zamak #2 declined by 3¢/lb to $1.305/lb delivered US consumer on Tuesday, while Zamak #3 slipped by 2.5¢/lb to $1.275/lb. Zamak #5 dipped by 3.3¢/lb to $1.29/lb, and Zamak #7 decreased by 3.5¢ to $1.275/lb delivered on Tuesday. 


The zinc alloy indexes fell by 1.6-2¢/lb, depending on the grade. The Davis Indexes for both ZA 8 and ZA 12 declined by 1.6¢/lb to $1.325/lb delivered and $1.345/lb delivered, respectively, while ZA 27 fell by two pennies to $1.365/lb delivered US consumer.


A potential second wave of shutdowns in Europe stemming from rising COVID-19 infections has the global market on edge. In the domestic zinc alloy market, producers are closely eyeing diverse economic trends, such as currency fluctuations, manufacturing data, and the US presidential election result, all of which have caused the market to decline.


On the other hand, domestic demand has improved from lower zinc prices, and zinc alloy producers are confident about prices increasing in the short-to-medium-term on auto markets returning to pre-pandemic production levels, and the housing boom.

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