The prices for US zinc scrap were flat to down, depending on grade, on Thursday despite a surge on LME zinc as supply chains for the metal were restored.
The weekly Davis Index for new zinc diecast continued its downward movement, falling by 1.5¢/lb to 76.3¢/lb delivered US consumer. The index for zinc galvanizers bottom dross inched down by 0.2¢/lb to 73.5¢/lb delivered, while zinc galvanizers top dross moved up by 0.3¢/lb to 70.8¢/lb on Thursday.
The index for SHG zinc premium remained unchanged at 8.5¢/lb under the three-month LME zinc contract as supply increased.
LME zinc continued its upward movement during the week, with the official three-month official LME zinc contract closing Thursday at $2,390, more than $100/mt above its close of $2,284/mt on July 30. The metal’s prices this week surpassed its previous high of $2,299/mt achieved on July 31 and has climbed by over 30pc since its low in mid-March.
The lack of supply for primary zinc, which had spurred prices until last week, seems to have stabilized this week with the zinc mines in Australia making up for some of the lost volumes from the continued shutdowns in Peru, which is the second-largest zinc producer in the world. However, recent reports also indicate an abundance of zinc stocks in LME warehouses even though demand remains muted and despite zinc concentrate suppliers resuming production at adequate levels after COVID-19 related lockdowns in the global market.
Domestic zinc scrap prices are also moving at a slower pace and within a narrow range as COVID-19 cases continue to spike across the country. Although the trend has made some market participants nervous about a potential round of shutdowns again, positive manufacturing PMI has kept the market confident about sustained demand. However, supply also remains a concern for the domestic market, with raw material inventory PMI among suppliers contracting last month.