Domestic lead scrap and ingot prices in Mumbai and Delhi dipped to the lowest levels of March on the last day of the month. Prices fell slightly by less than 1pc from the previous week triggered by a drop in LME lead levels. Prices are down for the second consecutive week for all the grades. The official three-month LME lead contract on Tuesday settled at $1,968/mt, down by $7.5/mt. In a month, the contract has dipped 6pc, or by $118/mt, which has also pushed down domestic prices.
Despite adequate demand on Wednesday trades were slightly lower as it was the last day of the fiscal year and some market participants finished-up year-end account procedures and balance sheets. Most large-scale mills, however continued normal business activities. Demand is expected to pick up in the beginning of next week which might support domestic prices.
The weekly Davis Index for lead batteries (drained) on Wednesday settled at Rs90,167/mt ($1,230/mt) del Mumbai consumer, down by Rs666/mt on lowered offers prompted by lower LME levels. In March, weekly price drops were more severe than weekly gains which could mean that demand was slightly stressed in the month. The weekly Index for lead batteries (drained) in Delhi on Wednesday settled at Rs93,250/mt del consumer, down by Rs667/mt.
Mumbai and Delhi markets for lead batteries (drained) price indexes weakened in terms of spreads which widened. Spreads for Delhi price index widened by 0.84pc while the spreads for Mumbai price index widened by 0.83pc. A drop in lead batteries (drained) prices also resulted in secondary lead ingot offers to drop as raw material prices dipped.
Demand from battery makers is not as strong as was expected, which caused prices to drop by the end of March compared to the first week. Demand is expected to pick up sharply beginning next week as production of inverters will be ramped-up. Domestic prices would be supported by this sudden boost in demand but on the other hand, if LME level drops further, battery makers might have to resort to importing rather than buying domestic material. The Indian currency is losing its strength as dollar is gaining, which would also affect the outcome for lead domestic market as India enters the new fiscal year.
The weekly Davis Index for secondary lead ingot on Wednesday settled at Rs152,100/mt ex-works Mumbai producer, down by Rs1,317/mt on lowered offers. Markets have weakened in terms of spreads which narrowed by 1.53pc from the previous week.
The weekly Index for secondary lead ingot in Delhi settled at Rs158,667/mt ex-works producer, down by Rs250/mt, also driven by lowered offers. Scrap prices have also fallen, which is the basic raw material for smelters, forcing secondary lead ingot producers to offer at lower levels. Spreads for the price index narrowed by 0.81pc from the previous week depicting a weakened market.
($1 = Rs73.3)