Market Data
September 23, 2020
CRU: Zinc Demand from U.S. Steel Mills Increases
Written by Helen O’Cleary
By CRU Senior Analyst Helen O’Cleary and found in CRU’s Zinc Monitor
US steel mills have reportedly been taking more refined zinc over the past few weeks and the outlook for Q4 is looking slightly more positive according to market contacts. There have been suggestions that the uptick in spot demand from mills could be partly due to lower spot premia on offer compared with long term contracts, providing an incentive to take the minimum on contract and then purchase additional spot tonnage. However, a producer in North America confirmed that some steel mill customers were taking the maximum on their contracts in September and have been asking for additional spot tonnage as they have been caught short by improving demand from the automotive sector. It is important to note that this is from an exceptionally low base, as US light vehicle output fell 33.8% y/y in H1 according to LMC Automotive. HDG coil prices have also increased throughout August, with lead times being extended, due to the uptick in automotive demand.
