Prices of zinc grades rose in the domestic markets in the week ending November 9 by approximately Rs1,200-4,500/mt from the previous week in sync with rise in LME zinc contract. On Friday, the official LME three-month contract rose by $87.5/mt and closed at $2,624/mt, marking a jump of 3.4pc in a week. Markets for zinc, however, weakened despite a rise in domestic prices in terms of spreads.
Zinc galvanizer’s dross
The weekly Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs166,067/mt ($2,244/mt) ex-works producer, up by Rs1,177/mt on Monday. Offers were raised as primary metal prices rose to approximately Rs212,000-214,000/mt, up by almost Rs5,000/mt from the previous week.
In Mumbai and Delhi, demand for dross is not too healthy from oxide manufacturers, neither is demand for zinc galvanized steel due to sluggish pace of construction work. The weekly Davis Index for zinc galvanizer’s dross Monday in Delhi settled at Rs170,445/mt ex-works producer, up by Rs2,070/mt. Demand for dross in the north is better than demand in Mumbai.
The market for zinc dross in Mumbai weakened as spreads for the index widened by 1.78pc from the previous week and spread for Delhi index widened by 1.37pc despite a rise in indexes. During this period, LME zinc rose by over 3pc while indexes rose by 1.2pc in Delhi and 0.71pc in Mumbai.
Secondary zinc ingot
In Mumbai, the weekly Davis Index for secondary zinc ingot settled at Rs168,500/mt ex-works consumer, up by Rs2,500/mt. Demand from brass manufacturers has revived marginally which is likely to stay firm or increase further on festive accounts. This would support prices of secondary zinc ingots in the coming weeks.
In Delhi, the weekly Davis Index for secondary zinc ingot settled at Rs170,000/mt ex-works consumer, up by Rs3,500/mt on the back of higher offers amid LME zinc rally during the week. Prices are expected to rise further, said market participants.
The market for secondary zinc ingot weakened in Mumbai and Delhi as spreads for the indexes narrowed by 1.12pc and 0.61pc, respectively. Index for secondary zinc ingot Mumbai rose 1.51pc and for Delhi was up 2.10pc. Despite a rise in prices, spreads contracted as LME was up by 3.4pc from the previous week.
New Zinc Diecast
The weekly Davis Index for new zinc diecast rose by $13/mt on Monday and settled at $1,894/mt cfr India port. Demand is on the lower side for new zinc diecast in India and only a few trades took place at $1,900/mt. Traders are bidding at around $1,800-1,820/mt cfr India port. Market for new zinc weakened in the week with spreads widening by 1.98pc from the previous week.
The weekly Davis Index for Zamak #3 Monday settled at Rs224,750/mt del India consumer, up by Rs4,490/mt. Prices rose on the back of higher offers. Manufacturers raised prices of Zamak on the back of higher primary zinc prices in the week. Demand from auto sector was healthy as auto sales went up. The weekly Davis Index for Zamak#5 settled at Rs227,750/mt del India consumer, up by Rs4,490/mt. However, market for Zamak#3 and Zamak #5 weakened. Spreads narrowed for Zamak#3 by 0.88pc and Zamak#5 by 0.92pc from the week prior.
Demand for zinc scrap and ingots heavily depend on auto and infrastructure sectors. Auto sector recovery has supported zinc prices and is likely to continue to do so but demand from infrastructure is still lagging. Market participants are hoping to see a revival soon with the multiple packages announced by the government to boost infrastructure sector.