Lead scrap and ingot prices in Mumbai and Delhi dipped in comparison to those last week due to an increase in COVID-19 cases and fear of a potential third wave. Weak sentiment led some participants to offload their inventories before prices dip further.
Domestic lead scrap prices fell in both Mumbai and Delhi despite a gradual uptick in the official three-month LME lead contract which settled at $2,313.5/mt on Tuesday, an increase of 1.34pc or $30.5/mt from last week. Domestic markets weakened in terms of spread for the lead grades as prices failed to climb in line with the LME gains owing to lower bids from market participants anticipating the third wave of COVID-19 and resulting restrictions.
The weekly Davis Index for lead batteries (drained), Wednesday, settled at Rs92,556/mt ($1,240/mt) del Mumbai consumer, down by Rs2,094/mt pressured by persistent low bids in a dull market. Trades have started to slip with smelters witnessing a drop in demand from battery manufacturers as domestic consumption braces for a downturn. The Davis Index for secondary lead ingot settled at Rs158,667/mt ex-works producer, down by Rs2,923/mt from a week ago. Smelters have reduced offers to boost sales and lower inventories before prices start to fall.
The weekly Davis Index for lead batteries (drained) for Delhi, Wednesday, settled at Rs93,390/mt del Delhi consumer, down Rs300/mt. Delhi markets remained stable compared to Mumbai markets. Prices have gradually increased each week owing to production cuts and labour shortages. The Davis Index for secondary lead ingot for Delhi, Wednesday, settled at Rs159,421/mt ex-works producer, down Rs521/mt from last week due to weakening demand.
Imported secondary lead ingot prices, Tuesday, traded at Rs170,000/mt del Mumbai consumer. Domestic grades might witness a growth in demand in the coming weeks, as the Indian Rupee has contracted, thus making imports more expensive.
The auto sector is expected to return to optimal capacities with a rise in demand. However, a potential third wave of COVID-19 could dampen business sentiments.