Zinc scrap prices in Delhi and Mumbai for most grades dipped on Monday from a week ago, pressured by lower bids. Demand improved since the lockdown restrictions were lifted. Most grades on Monday fell by Rs3,000-3,600/mt, while prices for Delhi zinc dross registered an uptick of Rs235/mt.
The official three-month LME zinc contract rose marginally by $10/mt or 0.35pc to $2,896/mt on Friday from a week ago. The official LME spot contract, however, fell by $10/mt to $2,876.5/mt on Friday, which resulted in a downward revision of primary zinc and Zamak price.
Zinc galvanizer’s dross
The weekly Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs194,950/mt ($2,627/mt) ex-works producer, down by Rs3,214/mt on Monday driven by a dip in offers on a decline in zinc prices. The weekly Davis Index for zinc galvanizer’s dross in Delhi settled at Rs195,225/mt ex-works producer, up by Rs235/mt on Monday. A rise in demand from brass and oxide manufacturers has supported the trading of dross in Delhi over the last couple of weeks.
The easing of lockdowns has bolstered demand in Delhi and Mumbai. But prices were pressured in Mumbai due to a shortage of laborers and supply chain issues hampering production. Both the markets for dross have weakened in terms of spreads compared to the prior week. Although demand has increased, it is yet to keep up pace with producers’ expectations.
Secondary zinc ingot
The Davis Index for secondary zinc ingot in Delhi settled at Rs195,500/mt ex-works consumer, down by Rs3,333/mt from a week ago, driven by a dip in bids on the weakening LME three-month contract. Manufacturers focused on liquidating inventories and have lowered offers to attract fresh deals. The weekly Davis Index for secondary zinc ingot for Mumbai settled at Rs197,638/mt ex-works consumer, down by Rs3,619/mt. Brass manufacturers in Delhi and North have kept their bids for secondary ingots low.
New zinc diecast
The Davis Index for imported new zinc diecast settled at $2,267/mt cfr India port, down by $32/mt, also on a dip in LME zinc. Continued lower bids from Indian importers and the LME drop kept deals at around $2,300/mt cfr India port. With brass manufacturers slowly entering the markets after the lockdown, demand for new zinc diecast will pick up and support prices.
The weekly Davis Index for Zamak #3 on Monday settled at Rs248,790/mt del India consumer, down by Rs1,600/mt. The fall in zinc LME spot prices pushed primary zinc prices down. Demand is on the recovery path but could take time to return to normalcy, believe die casters. Orders increased with a revival of the auto sector. Markets for zinc alloys weakened in terms of spreads followed by a fall in prices over the week.
The government has announced some relief for COVID-19 stricken sectors on June 28, which can change the current sentiment in the market. Demand can improve in the following week if the government supports the auto, infrastructure sectors particularly. Market participants are waiting for clarity over the implementation of the announcement.