With restrictions in major Indian cities tightening to control COVID-19 spread, lead scrap markets in Delhi and Mumbai stayed shut. The Davis Index for secondary lead ingot settled at Rs139,500/mt ($1,821/mt) ex-works Mumbai producer and Rs140,967/mt ex-works Delhi producer, both flat from prior Wednesday.
Smelters are shut for operations in Delhi as well as Mumbai, a COVID-19 hotspot. Operations in these cities are unlikely to resume till May 3 at the minimum. Some battery manufacturers have resumed partial operations in southern India.
Market participants are unsure about the direction markets are headed. Earlier, some traders believed demand for scrap would rise as soon as markets reopen. But the extension announcement and the resulting impact on the economy has dampened market sentiment. Demand for scrap would only recover when end use consumers start pick up demand which would drive demand up for scrap.
The Davis Index for lead batteries (drained) settled flat at Rs83,725/mt ex-works Mumbai consumer and Rs84,133/mt ex-works Delhi consumer, flat on Wednesday. Major problem manufacturers currently face is non-availability of labour and logistical challenges.
Since April 20, the government has decided to relax some lockdown restrictions, allowing some manufacturing units with export orders to carry out operations. This, provided they are in non-hotspot zones and city outskirts.
The three-month official LME lead contract settled at $1,671.5/mt on Tuesday from $1,707.5/mt a week ago, down by $36/mt in a week. Primary lead prices are usually in line with the LME prices and since lockdown, LME has climbed by approximately $30/mt, revised primary lead prices could see a rise.