The weekly Davis Index for zinc galvanizer’s dross in Mumbai Monday rose by Rs5,556/mt ($75/mt) to Rs187,889/mt ex-works producer, on the back of increased demand from oxide manufacturers. With economy recovering from the pandemic, demand for oxide has gone up, driving production and consumption of zinc dross.
Galvanizer’s have raised offers of dross in Delhi and Mumbai as prices of primary zinc have increased in sync with LME zinc. The official LME zinc contract on Friday settled at $2,838/mt, up by $68/mt or 2.45pc, from the previous week. The weekly Davis Index for zinc galvanizer’s dross in Delhi Monday settled at Rs192,667/mt ex-works producer, up by Rs77/mt.
In Mumbai, market for zinc galvanizer’s dross strengthened as spreads for index contracted by 0.82pc while the index was up 3.05pc from the week prior. In Delhi, the market weakened with spreads widening by 1.91pc from the previous week. The index for zinc dross in Delhi was marginally up by 0.04pc.
In Delhi, the weekly Davis Index for secondary zinc ingot on Monday rose by Rs799/mt to Rs196,889/mt ex-works consumer on the back of strong demand from brass manufacturers. In Mumbai, the weekly Davis Index rose by Rs1,967/mt to Rs192,450/mt ex-works consumer. Dross and secondary zinc ingot prices jumped higher in Mumbai than Delhi this week.
Markets for secondary zinc ingot in Delhi and Mumbai have weakened as spreads for the indexes narrowed by 1.60 and 0.98pc, respectively, from the week prior despite Delhi index moving up by 0.41pc and Mumbai by 1.03pc.
The weekly Davis Index for Zamak #3 on Monday settled at Rs241,769/mt del consumer up by Rs2,569/mt. Prices of SHG (Special High Grade) zinc were around Rs223,000-224,000/mt in Mumbai and Rs228,000-230,000/mt in Delhi, slightly higher than previous week. However, analysts at HDFC Securities told Davis Index that most base metals will trade sideways in the coming week. Prices of SHG zinc are also expected to remain flat or slightly lower, depending on LME trend. This would determine prices of dross, too, in the coming week.
The weekly Davis Index for Zamak #5 rose by Rs2,569/mt on Monday to Rs244,769/mt del consumer. Demand from auto and gas regulator manufactures is firm, shared Delhi-based alloy manufacturers. Infrastructure growth is picking up in most parts of India –a potential demand booster for Zamak. Some die-casters in Mumbai are bidding at around Rs239,00-240,000/mt del rate as prices are unusually high.
Spreads for Zamak #3 and Zamak #5 narrowed for their present indexes by 1.18pc and 1.22pc, respectively, from the prior week. This shows that markets for the alloy grades have weakened from the preceding week despite a rise in prices.
The weekly Davis Index for new zinc die-cast on Monday settled at $2,120/mt cfr India port, up by $61/mt due to high demand for scrap to manufacture secondary zinc ingots.
Zinc prices are up for the sixth week across all grades and the rally in prices may hit the brakes soon heading into the holiday season, market participants noted.