The Davis Index for US zinc secondary alloys surged by 6-7¢/lb across most grades on Tuesday as demand improved and LME zinc shrugged off its sluggish pace to approach its pre-pandemic highs.
The official LME zinc cash offers, which are used to calculate zinc alloy prices, ended Tuesday at $0.9922/lb up from $0.9242/lb on July 7. The official three-month LME zinc contract spiked to its highest point since early February ending on Monday, July 13 at $2,223/mt before giving away some of its gains to close Tuesday at $2,198.50. Yet, it remained $150.50 above its July 7 close of from $2,048/mt.
The weekly Davis Index for Zamak #2 increased by 7¢/lb to $1.212/lb delivered US consumer. The index for Zamak #3, Zamak #5, and Zamak #7 all surged by 7¢/lb to $1.182/lb delivered US consumer, $1.197/lb delivered, and $1.182/lb delivered, respectively.
The indexes for zinc alloys ticked up for ZA 27 by 6¢/lb to $1.262/lb delivered US consumer and rose for ZA 8 and ZA 12 by 7¢/lb to $1.232/lb delivered and $1.252/lb delivered, respectively.
Zinc alloy prices have also benefited from the steady increase in demand for the material as manufacturing remains largely unaffected by the rising COVID-19 cases in the country. The steady ramp-up in the automotive and manufacturing industries has, in fact, dissipated some of the uncertainty that alloy producers were feeling until last week, according to some market participants.
In the construction sector too, demand continues to outpace supply providing another avenue of optimism for zinc alloys producers who supply material to this industry.