Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Zinc ingots, alloys and most scrap grades trended down over the last 10 days on Monday. Previous pricing for zinc market was done on March 26, ahead of the Holi festival. Prices since then slid on the back of dip in LME levels and low demand. A sharp fall in LME three-month zinc contract was witnessed on March 31 and April 1. The contract dipped 1 pc each on both these days. Most zinc grades dipped under 1pc or Rs1,000-2,000/mt ($13-28/mt) in a period of 10 days. Imported new zinc diecast fell by over $100/mt as several offers for US and European origin were lowered. 


The US dollar strengthened, which put LME zinc under pressure as warehouse stocks fell in the last two sessions. However, zinc is expected to rise after the Easter holidays on the back of US President Biden’s infrastructure announcement. This may result in revision of zinc prices in India for both, primary and secondary markets. 


Zinc galvanizer’s dross
Primary zinc manufacturers have kept prices unchanged since March 25. Prices were not updated until the time of publication. Primary zinc prices were around Rs226,000-236,200/mt. In Delhi, primary zinc was heard around Rs226,000/mt del consumer. Dross prices in Delhi were heard between Rs190,000-191,000/mt ex-works producer. Producers were fielding offers on Monday but agreed to reduce prices in line with LME and amid fears of declining demand against a possibility of a lockdown. Markets for zinc galvanizer’s dross in Mumbai and Delhi weakened as price index’s spread widened by 1.98pc in Delhi and by 1.99pc in Mumbai.


The Davis Index for zinc galvanizer’s dross in Delhi settled at Rs189,500/mt ($2,582/mt) ex-works producer, down by Rs833/mt on Monday from March 26. Offers were lowered prompted by low demand and fears of stringent lockdown. Markets in Delhi and Mumbai were feeble for zinc as the possibility of renewed lockdown pressured demand and supply side. The Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs185,750/mt ex-works producer, down by Rs917/mt from March 26. Demand for dross from oxide manufacturers and brass manufacturers is not as strong as was expected. Tyre production may temporarily suffer on the back of erratic closures of several auto manufacturing units worldwide which will affect demand for zinc oxide and zinc dross.


Secondary Zinc Ingot
Demand for secondary zinc ingot on Monday was slightly weak in Delhi and Mumbai which resulted in lower offers. The Davis Index for secondary zinc ingot in Delhi settled at Rs197,000/mt ex-works consumer, down by Rs750/mt from March 26. Markets weakened in terms of spreads which narrowed by 2pc. Low demand is a major concern for market participants.


Alarming rate of increase in COVID-19 cases in India is spreading fear across markets in India. Offers were, therefore, reduced to attract bids while raw material prices also declined slightly on Monday. The Davis Index for secondary zinc ingot for Mumbai settled at Rs193,083/mt ex-works consumer from March 26. Market for the grade weakened as spreads narrowed 1.98pc from March 25 for the price index which dipped by 0.40pc in 10 days. 


Brass manufacturers held back purchases and new orders after a decline in demand on the back of COVID-19 surge. Sellers have revised offers downwards to clear out inventories before prices are feared to fall further. 


New Zinc Diecast
The Davis Index for new zinc diecast on Monday settled at $2,457/mt cfr India port, down by $137/mt from March 26. Several sellers have reduced offers in line with LME zinc contract. Offers were heard between $2,100-2,600/mt cif India port but most deals took place around $2,300-2,350/mt cfr India port. A drop in new zinc diecast prices resulted in a drop in secondary zinc ingots. Market for new zinc diecast  grade weakened in terms of spreads which widened by 5.25pc from 10 days prior. 


Zinc Alloy
The Davis Index for Zamak #3 on Monday settled at Rs237,700/mt del India consumer, down by Rs2,054/mt from March 26. Producers revised offers downwards which pushed the index lower. Demand was uneven across India. Diecasters are not receiving healthy orders which is pushing demand for Zamak #3 and Zamak #5down. Infrastructure sector is hurt due to resurgence of COVID-19 cases which is impacting demand for zinc alloys. Furthermore, auto sector is also weak amid a shortage of semi-conductors. The Davis Index for Zamak #5 on Monday settled at Rs240,200/mt del India consumer, down by Rs2,554/mt from March 26. Markets for zinc alloys weakened in 10 days ending Monday, in terms of spreads, which narrowed by 2.99pc for Zamak #3 and by 3.26pc for Zamak #5 price indexes. 


Overall consumer sentiment is weak which is impacting demand and prices in India. COVID-19 scare, low demand and market not being fully operational are the major concerns in India for metal segment currently. 



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