Zinc scrap and ingot prices moved higher on Monday as offers were pushed up in line with the increase in the LME zinc contract. A rise in LME levels, pushed primary zinc up and consequently, zinc alloy and dross prices increased over the week.
The official three-month LME zinc contract increased by $45.5/mt to $2,995.5/mt on Friday from a week prior. Base metals were supported by easing worries from China after it succeeded to curb the fresh COVID-19 outbreak. Base metals gained after shipping ports reopened for key trade routes.
Primary zinc prices gained by almost Rs3,000/mt ($40/mt) on Monday from a week ago. Primary zinc was around Rs250,000-253,000/mt del India consumer. A hike in primary zinc led to higher dross prices. The weekly Davis Index for zinc galvanizer’s dross in Delhi settled at Rs197,283/mt ex-works producer, up by Rs1,193/mt on Monday. Trades for dross have remained healthy. Similarly, the Davis Index for zinc galvanizer’s dross for Mumbai settled at Rs205,000/mt ex-works producer, up by Rs2,500/mt.
The weekly Davis Index for secondary zinc ingot on Monday for Delhi settled at Rs202,033/mt ex-works consumer, up by Rs1,533/mt. Galvanizing orders have started to increase, shared market participants amid a rise in demand from the infra and construction sectors. Demand for steel is still low but expected to move up with the retreating monsoon. As demand for steel improves, demand for zinc galvanizing should improve. The weekly Davis Index for secondary zinc ingot for Mumbai settled at Rs201,325/mt ex-works consumer, up by Rs2,825/mt on higher offers amid a jump in LME. Demand for the material remains subdued in Mumbai.
The Davis Index for New zinc diecast on Monday settled at $2,353/mt cfr India port, up by $31/mt from the preceding week driven by higher freight and material shortage of scrap, globally.
The weekly Davis Index for Zamak #3 on Monday settled at Rs257,133/mt del India consumer, up by Rs3,100/mt driven by an increase in demand from die casters which supported Zamak prices. Offers were heard between Rs256,000-258,000/mt. The Davis Index for Zamak #5 settled at Rs259,633/mt del India consumer, up by Rs2,766/mt from a week ago. Prices were primarily up influenced by the hike in zinc primary ingot prices, the basic raw material for primary Zamak. Demand from die casters has improved which also pushed demand for secondary Zamak in Delhi.
Zinc domestic market improved for all the grades on Monday in terms of spread, compared to the prior week with a hike in offers led by improved demand for scrap. Trades have started to improve which has instilled confidence in the market which is expected to be better as we move towards the festive season which would result in higher end-user demand. Market participants, however, remain cautious of the COVID-19 situation.
($1=Rs73.47)