The weekly Davis Index for secondary lead ingots Wednesday rose by Rs1,250 ($16/mt) to Rs135,200/mt ex-works producer from the prior week. Prices rose on the back of resumption of manufacturing operations in Delhi.
Secondary lead ingot prices in Delhi rose on improved demand from battery manufacturers as local and small enterprises resumed operations after the government eased the three-month long lockdown on Monday. Traders in Delhi were eager to sell ingots as soon as the markets reopened as they projected an uptick in demand. Market participants in Delhi believe that prices could remain on similar levels or rise higher until next week as more demand is expected from battery manufacturers across India.
The Davis Index for secondary lead ingots in Mumbai settled at Rs134,200, down by Rs550/mt Wednesday, ex-works producer as resumption of activities is on a relatively slower pace. Mumbai smelters are yet to deliver their previous consignments which remains their priority. New orders were not yet booked, said smelters, however, they are hoping for a new wave of demand in this week.
Demand from battery makers is around 1/3rd of the previous year as major battery manufacturers have cut production by 40pc in June. Sale of battery is dependent on demand from auto, generators, UPS systems etc. Auto sales are projected to fall by 22-25pc in the fiscal year 2021, according to India Ratings and therefore near term auto sales look bleak. Seasonal demand for generators and inverters persist until July end and this could drive demand for ingots and scrap. Demand for batteries was termed ‘fairly good’ for June compared to May, said a South-based battery manufacturer.
Battery manufacturers in non-containment areas were recently allowed to open their dealerships which would push sales, driving demand for secondary ingots by battery manufacturing plants. Major battery companies cited that they are on a gradual production ramp up process which would result in moderate rise in demand for ingots in the coming weeks.
The weekly Davis Index for lead batteries (drained) settled at Rs76,950/mt del Delhi consumer, down by Rs3,000/mt from the prior week due to weak demand for scrap. Similarly, the Davis Index for Mumbai lead batteries (drained) settled at Rs76,950/mt, down by Rs3,413/mt Wednesday from the week prior.
COVID-19 has impacted sales and production of batteries during lockdown. The resuscitation of supply chain disruptions is of major significance to lead market, opined battery manufacturers. The worst phase of the lockdown may be over but new and more challenges may arise during the revival of the economy.
Primary lead producer in India raised their offers for lead ingots by Rs4,300 on June 8 revised from June 4 as the official three-month LME lead contract rose by Rs61/mt to $1,747/mt in a week since prior Tuesday and is seen on an uptrend.
($1=Rs75.57)