The Davis Index for US secondary zinc alloys rose for some grades in anticipation of improved demand upon automotive manufacturing plants restarting early next week.
The weekly Davis Index for ZA 12 and ZA 27 increased by 1.2¢/lb and 1.9¢/lb to $1.146/lb delivered US consumer and $1.160/lb delivered, respectively, on Tuesday. The index for Zamak #2 also inched up by half a penny to $1.091/lb delivered US consumer.
However, the indexes for other zinc alloys trended flat to down. The index for ZA 8 fell to $1.096/lb delivered US consumer from $1.098/lb delivered on Tuesday, and remained unchanged for Zamak #3 and Zamak #7 at $1.051/lb delivered. The Davis Index for Zamak #5 also held at $1.066/lb delivered US consumer on Tuesday.
Market participants expect an uptick in demand because automotive parts suppliers in Michigan could restart operations this week to shore up the supply chain for automotive manufacturing facilities, most of which will reopen next week.
Moreover, LME zinc prices have been rising steadily over the past few weeks because of stronger demand for the material in Asian countries, like China and South Korea, where automotive and manufacturing facilities resumed operations late last month. As a result, demand for zinc and zinc alloys has increased in East Asia.
The official LME cash offer closed Tuesday at $0.9154/lb, rising from $0.8607/lb on May 5. The official three-month LME zinc contract settled on Tuesday at $2,019/mt. up by $110/mt from $1,909.5/mt on May 5.