Domestic prices of zinc grades dipped between 1-3pc as LME fell sharply over the week. The official LME zinc three-month contract on Friday settled at $2,745, down $100 or 4pc which also resulted in lower primary zinc prices. Domestic markets in India strengthened in terms of spreads despite prices falling but supported by healthy demand in Delhi and Mumbai.
In Mumbai, the weekly Davis Index for zinc galvanizer’s dross settled at Rs193,667/mt ($2,653/mt) ex-works producer, down by Rs333/mt as lower bids pulled prices down. Demand for dross remained firm. In Delhi, the weekly Index for zinc galvanizer’s dross settled at Rs193,900/mt ex-works producer, down by Rs2,044/mt. Galvanizer’s could lower offers in the market as prices of primary zinc also went down. Markets for zinc dross in Delhi and Mumbai strengthened as spreads narrowed compared to the week prior– by 3.08pc in Delhi and 3.90pc in Mumbai.
The weekly Davis Index for secondary zinc ingot in Delhi fell by Rs2,900/mt to Rs195,000/mt ex-works consumer on Monday as market strengthened and spreads widened by 2.70pc. Prices are low in Delhi due to subdued demand from brass manufacturers in India who were resisting the high prices since last couple of weeks. The weekly Index for secondary zinc ingot in Mumbai settled at Rs192,200/mt ex-works consumer, down by Rs3,000/mt. Spreads for the index expanded by 2.6pc in Mumbai.
Brass manufacturers are hopeful of demand for brass products to increase in the coming weeks. Market needs to improve for secondary ingot in terms of demand and prices, a source informed Davis Index, as prices are still too high despite a fall in LME which should have ideally pushed secondary prices lower.
The weekly Davis Index for new zinc diecast settled at $2,133/mt, up by $21/mt as demand from Indian buyers continues to be strong as international markets are yet to reopen after the holidays.
The weekly Index for Zamak #3 settled at Rs234,085/mt del India consumer, down by Rs7,415/mt from last Monday. Prices dipped for the second consecutive week for zinc alloys in line with raw material prices.
The weekly Index for Zamak #5 fell by Rs7,415/mt Monday to Rs237,085/mt del India consumer. Markets for Zamak #3 and Zamak #5 strengthened as spreads for the indexes widened by almost 1-1.4pc.
Primary zinc on Monday was quoted around Rs220,000-229,000/mt across India, down from Rs228,000-238,000/mt last Monday. With a dip in primary zinc prices, galvanizers settled on lower offers as a result of lower bids. Even Zamak producers lowered offers in line with LME and primary zinc prices.
Demand for zinc for galvanizing is increasing in the country, in sync with steel demand However, if LME slides further, prices in domestic markets could suffer.
($1=Rs73)