US zinc scrap prices fell for a second consecutive week amid a volatile LME zinc market and balanced supply and demand.
Galvanizer grades slipped by 1-2¢/lb this week. The weekly Davis Index for zinc galvanizers bottom dross dropped by 1.3¢/lb to 68.3¢/lb delivered US consumer. Zinc galvanizers top dross fell by 2.2¢/lb to 65.3¢/lb delivered.
The Made in America initiative recently announced by the Biden government is likely to increase steel consumption, especially in the infrastructure and public construction sectors, which will increase the demand for galvanizing. Buyers are likely to take advantage of lower dross prices to fill their volumes in anticipation of higher demand.
The weekly Davis Index for new zinc diecast fell by 3.5¢/lb to 74.3¢/lb delivered US consumer. Some Midwest dealers have achieved prices as high as 77¢/lb into smelters delivering specific orders to the automotive sector. Still, this trend might be adversely impacted by General Motors’ announcement on Thursday that it was temporarily shutting down production at three of its North American plants, one of which is in Kansas, due to a semiconductor shortage.
In primary markets, special high-grade zinc premiums inched up by 0.1¢/lb to 8.1¢/lb under the three-month LME Zinc contract.
The three-month official LME zinc contract stemmed some of its losses from the end of January and closed Thursday at $2,621/mt up by $51/mt from Jan 27. LME prices have remained volatile this past week on rising inventories in LME warehouses and COVID-19 related shutdowns in China, which has the largest number of galvanizing plants in the world.