Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian zinc scrap market recorded low trades this week as secondary smelters in Delhi and Mumbai gradually resumed production. Demand from downstream consumers has improved from the prior week but not as expected. Many zinc recyclers are in a dilemma whether to restart operations or wait for the COVID-19 scare to subside. 


Galvanizers and brass makers, who are the main consumers of secondary zinc ingots, are still in the process of resuming operations in major cities. The Davis Index for secondary zinc ingots Friday settled at Rs159,700/mt ($2,103/mt) ex-works Mumbai consumer and Rs169,000/mt ex-works Delhi consumer up by Rs9,050/mt from pre-lockdown level as demand gradually increased. 


In Delhi offers for secondary zinc ingot were heard at Rs169,000-170,000/mt. Prices are projected to trend upwards in the coming weeks on the back of resumption in downstream businesses post lockdown. 


Market participants have articulated that lack of labour along with logistics problem due to the absence of drivers is affecting resumption of trading in most markets. Some traders hoped that the worst phase of the lockdown is over and soon demand will be restored. 


Galvanizers have resumed operations but reproduction remains halted in Mumbai. In Delhi, galvanizers have zinc dross inventories which could last for the next few weeks but everything remains shut in Mumbai. Zinc oxide manufacturers have inventories of dross which could last till the end of June depending on the demand from end-users like tyre, fertilizer and ceramics and paint manufacturers. Davis Index for galvanizer’s dross settled flat at Rs146,325/mt ex-works Mumbai producer on Friday, while the index for Delhi settled at Rs158,000/mt ex-works Delhi producer up by Rs7,217/mt from pre-pandemic level as the market expects demand to improve. In Delhi, prices could be around Rs158,000-159,000/mt in the coming weeks, according to a Delhi trader. 


The Davis Index for new zinc diecast fell by $15/mt to $1,545/mt cfr India port on Friday from $1,545/mt cfr India port reported on Monday. Prices have slightly declined as demand in the domestic market is yet to pick up, said importers. Many importers are refraining from buying in bulk as zinc smelters across India are clearing piled-up inventories amid weak demand. 


Zinc Alloy


The Davis Index for Zamak #3 settled at Rs183,500/mt del India consumer, up by Rs12,967 from March 25 when prices were flat. The index for Zamak #5 settled at Rs186,500/mt del India consumer, up Rs12,467/mt since the beginning of the lockdown. Trades have resumed, especially in south India, where a higher number of companies have returned to production. 


Some die-casters in non-containment zones have resumed operations in India and are receiving low demand from automakers compared to zero demand in the previous weeks. Die-casters are retailing their finished inventories and soon would be bidding for Zamak in the next few weeks. 


Primary zinc manufacturers in India revised prices upwards by Rs5,800/mt on May 21 for Special High Grade zinc (SHG) to approximately Rs180,500/mt from Rs174,700/mt on Monday. Primary manufacturers mirror the official three-month LME zinc contract which was up by $48/mt to $1,993/mt on Thursday from $1,945/mt in the prior week.



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