The Davis Index for lead batteries (drained) in Mumbai, Wednesday, dipped by Rs60/mt and settled at Rs80,440/mt ($1,093/mt) del consumer. Scrap prices continued to decline for the third week driven by a drop in LME lead. However, markets strengthened in terms of spread.
The official three-month LME lead contract on Tuesday closed at $1,899.5/mt, down by $39/mt from the prior week.
The weekly Davis Index for secondary lead ingot in Mumbai Wednesday settled at Rs142,000/mt ex-works producer, down by Rs1,875/mt. Smelters in Mumbai revealed that prices are on a downward trend despite sustained demand, mainly pressured by international markets.
The market for battery scrap in Mumbai strengthened as spreads contracted, by 1.12pc from the prior week. Despite a drop in domestic prices, markets managed to stay firm as LME contract dipped by almost 2pc in a week. The market for ingots in Mumbai also strengthened as spreads widened marginally by 0.74pc despite domestic prices dropping 1.30pc from the prior week.
The Davis Index for lead batteries (drained) in Delhi on Wednesday rose by Rs166/mt and settled at Rs80,333/mt del consumer. Prices in Delhi are rising, driven by demand from smelters who are supplying healthy quantities to battery makers in the north and central regions of India. Battery makers are ramping-up production to meet the needs of auto sector ahead of the festive season. This demand is supporting prices of ingots. The weekly Davis Index for secondary lead ingots in Delhi settled upwards by Rs500/mt to Rs144,000/mt ex-works producer.
The market for scrap batteries in Delhi strengthened as spreads narrowed by 1.28pc from the prior week with domestic prices up marginally by 0.21pc on prior week. Similarly, the market for secondary lead ingots also strengthened with spreads widening by 2.44pc from the week prior. Domestic prices of scrap and ingots rose slightly in Delhi from the previous week while LME lead slipped by approximately 2pc in the same period, resulting in Indian domestic markets strengthening.
Market participants in Mumbai and west zone believe that market prices are resembling LME lead. In a month, LME lead three-month contract has dipped by almost $84/mt to its current levels which are hovering near its one-month low level. Offers in the market are moving in line with LME as demand improved in Delhi but was stagnant in Mumbai.
Auto sector’s demand has to improve as demand from industrial sector alone cannot sustain for long. Demand for industrial batteries is seasonally not strong in the beginning of Q3. The much awaited scrappage policy is submitted to the union cabinet for approval with market participants pinning hopes on this policy as it could boost auto sales.
($1=Rs73.52)