With India reeling under tremendous pressure to curb COVID-19 cases in major cities, very few lead trades were heard on Wednesday, with markets weakening over the week. Demand is dormant but market participants are hopeful that pent-up demand will play its part as soon as market conditions normalize after lockdowns are lifted — like in 2020.
The LME lead official three-month contract jumped by $105/mt to $2,179.5 on Tuesday from last week, which led to a small jump in scrap offers but low demand kept prices under pressure on Wednesday.
Rupee, on Wednesday, strengthened against the US dollar to Rs73.9 against the last week, inching closer to a one-month high which was around Rs72.8. This may shift domestic players’ focus to imports and consequently kept domestic prices under control.
Delhi
The weekly Davis Index for lead batteries (drained) Delhi moved up by Rs237/mt ($3.20/mt) on Wednesday to Rs94,525/mt del Delhi consumer on higher LME level which was offset to some extent by low demand. The official LME lead contract climbed 5pc over the week but domestic prices have maintained an equilibrium with the domestic market dynamics.
Spreads for the grade widened by 2.45pc over the week owing to subdued trading in a weakening market.
Secondary lead ingot prices also rose on the back of high scrap prices. The weekly Davis Index for secondary lead ingot settled at Rs161,075/mt ex-works Delhi producer, up by Rs342/mt. Very few deals were heard in the city in the first half of the day. In Delhi, offers remained around Rs161,000/mt this week as only a few bids were heard amid the ongoing lockdown, that has hit demand.
Spreads for secondary lead ingots in Delhi have narrowed by 4.22pc primarily driven by a slump in demand due to uncertain market conditions.
Mumbai
Number of COVID-19 cases in Mumbai have gone down — reaching its lowest since mid-March on Monday — indicating that the situation could return to normal soon. Lockdown in Mumbai is proving to be beneficial, which has impacted market sentiments. Trades were thin but smelters expect labours to return to work soon, increasing scrap collection and strengthening production of secondary ingots.
The weekly Davis Index for lead batteries (drained) in Mumbai settled at Rs91,575/mt del consumer, up by Rs425/mt with few deals being reported. Offers were almost flat compared to prior week.
Spreads widened for the scrap grade by 2.25pc from the previous week owing to subdued demand in the city.
The weekly Davis Index for secondary lead ingot rose to Rs155,075/mt ex-works Mumbai producer, up by Rs 500/mt, in accordance with a hike in lead batteries (drained) prices. Demand has dipped but smelters are expecting markets to improve.
Spreads contracted for the ingot by 3.39pc in a week which saw only a few enquiries while most small-scale market participants remained away due to COVID-19.
Most auto manufacturers have advanced their annual maintenance dates to May, which usually takes place in June. This could impact demand for batteries in the month. On the positive end, demand for industrial batteries — like UPS for medical purpose, and telecome batteries — is strong.
($1=Rs73.9)