The weekly Davis Index for most zinc grades on Monday rose marginally amid an uptick in offers, with only a few trades materializing. Negative sentiments amid COVID-19 lockdowns in several cities is hurting demand across India, however, certain traders opined that prices are unlikely to dip significantly and could be rangebound this week.
Delhi
The weekly Davis Index for secondary zinc ingot on Monday in Delhi settled at Rs201,333/mt ($2,784/mt) ex-works consumer, up by Rs2,666/mt amid high offers despite low demand as raw material prices for secondary zinc ingots are also high. Consumers were heard bidding under Rs198,000/mt for secondary zinc ingot and very few trades were heard at the index price. Brass manufacturers who buy secondary zinc ingots shared that trades have fallen because there is less demand from end-users and zinc prices are too high to be procured at these levels. The market for the grade strengthened in terms of spread which widened by 2.76pc from the prior week. Prices should fall back to be in-line with LME levels which could be why trades are down.
The weekly Davis Index for zinc galvanizer’s dross on Monday settled at Rs190,750/mt ex-works producer, up by Rs306/mt, a marginal jump due to high offers while some offers were unchanged compared to last week. Demand for dross from certain zinc oxide manufacturers was stable but demand from small scale oxide manufacturers was low as they are procuring only when end-user demand picks-up. Market for zinc galvanizer’s dross strengthened in terms of spread which narrowed by 1.53pc from the week prior.
Mumbai
The weekly Davis Index for secondary zinc ingot settled at Rs196,800/mt ex-works Mumbai consumer, up by Rs1,200/mt as raw material for production of secondary zinc ingot was high on Monday which made it difficult for producers of secondary zinc ingot to settle trades at lower bids. The market for the grade strengthened in terms of spreads which widened by almost 2pc from the previous week.
The weekly Davis Index for zinc galvanizer’s dross for Mumbai settled at Rs188,400/mt ex-works producer. Offers were range-bound in the city. Some offered at under Rs185,000/mt while some exceeded Rs190,000/mt. Few trades were heard around the index. Mumbai is battling an upsurge in COVID-19 cases which is causing volatile trading. Similar pattern is also being witnessed in Delhi. Price direction is difficult to forecast, said traders amid fears of stricter lockdown.
Zinc Alloys
Primary zinc prices across India dipped marginally from the previous week in line with LME levels but dross and secondary ingot prices moved in contrast with LME levels. The official three-month LME zinc contract on Friday settled at $2,798/mt, down by $26/mt or by 0.92pc in a week. As the fiscal year draws to an end, cash crunch is also why trades are down. Many would resume work in the beginning of the next fiscal year, i.e. April onwards.
Zinc alloy prices moved in line with LME levels, down marginally from the week prior. The weekly Davis Index for Zamak #3 on Monday settled at Rs237,500/mt del India consumer, down by Rs250/mt. Some producers were heard offering Rs243,000/mt in South India while offers in North India were heard around Rs235,000/mt ex-works producer.
The weekly Davis Index for Zamak #5 settled at Rs240,500/mt del India consumer, down by Rs250/mt, in line with LME. Prices of zinc alloys softened as demand is very low and fewer orders are being received by diecasters. Raw material prices are high, making it difficult for some to run shops in a low-demand period. The market for both the zinc alloys strengthened as spreads widened by over 1.6pc from the prior week.
Imported Zinc scrap
The weekly Davis Index for imported new zinc diecast on Monday settled at $2,592/mt cfr India port, up by $2/mt from the preceding week amid firm offers. Offers were heard between $2550-2,600/mt cfr India port. The market for the price index strengthened in terms of spread which narrowed by almost 1pc from the preceding week.
($1 = Rs72.3)