Lead scrap prices across grades rose as markets continued to improve post the easing of lockdowns in major states. Smelters reported higher capacity utilization this week. Offers for secondary lead ingots rose by over 2pc in Delhi and Mumbai compared to the prior week.
The weekly Davis Index for secondary lead ingots in Delhi, Wednesday, settled at Rs169,375/mt ($2,285/mt) ex-works producer, up by Rs4,042/mt from a week ago driven by a jump in offers in line with LME gains. Suppliers reported ample demand from consumers. The official three-month LME lead contract gained 1.91pc or $45/mt in a week and settled at $2,396/mt on Tuesday, Aug 3. The rise in LME lead lifted prices of all grades of lead scrap.
Demand for secondary lead ingots has increased while supply remains a tad tight. The easing of the lockdown has fared well for the lead market. In Delhi, secondary ingot prices rose almost Rs10,000/mt in a month. Delhi markets have strengthened in terms of spreads for secondary lead ingots, with significantly more deals taking place as smelting capacities are being ramped to cater to healthy demand from battery makers.
Markets for lead batteries (drained) weakened as low bids from smelters limited any further uptick in prices. The Davis Index for lead batteries (drained) for Delhi settled at Rs96,333/mt del Delhi consumer, up by Rs833/mt. Prices could rise further if secondary lead ingot manufacturers push operating capacities higher. Monsoon season bodes well for lead markets as demand for batteries increases with higher demand for generators and industrial UPS.
The Davis Index for secondary lead ingot in Mumbai settled at Rs165,500/mt ex-works producer, up by Rs3,333/mt from a week ago owing to improvement in demand and higher LME levels. The weekly index for lead batteries (drained), Wednesday, settled at Rs95,000/mt del Mumbai consumer, up Rs667/mt.
There is a window for battery scrap prices to increase as markets for the grade weakened despite a hike in prices. There could be an uptick for lead batteries (drained) next week. In Mumbai, markets for secondary lead ingot strengthened in terms of spreads, but markets for lead batteries (drained) weakened over the prior week owing to reasons similar to the Delhi market.
The automotive sector is recovering amid a ramp-up in production capacities. No new production halts have been announced lately, which bodes well for battery markets. Lead market participants remain optimistic about demand increasing in line with the growth in auto sales. Most are extremely confident of trades in the coming months.