Zinc prices fell across grades on Monday as offers were lowered amid a slight fall in LME zinc. The official LME three-month zinc contract fell by $47/mt and settled at $2,836.5/mt on Friday from the previous week.
Demand for zinc is pressured by the slow growth in construction and infrastructure. Market sentiments may have weakened with the sudden number of COVID-19 cases increasing which could pressure the markets hereafter. Demand for zinc was slightly low on Monday with lower trades recorded until the time of publication. Prices rose substantially in the prior week but slowly inched lower. Some market participants have decided to not make hasty procurements as they await a clearer price direction and competitive prices in the domestic market.
The weekly Davis Index for zinc galvanizer’s dross on Monday in Delhi settled at Rs199,833/mt ($2729/mt) ex-works producer, down by Rs238/mt as galvanizing units reduced offers since primary zinc ingot prices dipped in line with LME zinc.
Demand for dross was marginally weak as consumers hesitated to buy at high levels. A drop in raw material prices coupled with low demand for highly-priced dross resulted in offers dropping on Monday. Markets for zinc dross strengthened as spreads contracted for the grade despite a marginal fall of 0.12pc in index from the previous week. The spread for its price index contracted by 0.41pc from the preceding week.
The weekly Index for secondary zinc ingot in Delhi fell by Rs1,000/mt to Rs205,566/mt ex-works consumer. Market for secondary zinc ingot weakened as spreads for the price index narrowed by 0.21pc while the index fell by 0.75pc in a week. Prices dropped in Delhi and in Mumbai too but demand from some brass manufacturers remained firm.
The weekly Davis Index for zinc galvanizer’s dross settled at Rs193,500/mt ex-works Mumbai producer, slipping by Rs4,833/mt. Offers for dross in Mumbai were between Rs190,000-195,000/mt which brought the weekly index down from the previous week. Galvanizer’s noted a drop in steel galvanizing orders.
As COVID-19 cases are increasing, Mumbai might go under lockdown – a fear that created negative sentiment in market and could also be the reason for a significant drop in dross prices. The spread for dross price index widened by 1.81pc while the index fell significantly by over 2.44pc, depicting a weakened Mumbai market.
The weekly Davis Index for secondary zinc ingot in Mumbai settled at Rs200,000/mt ex-works consumer, down by Rs1,200/mt. The markets for the grade weakened with the spreads for the price index narrowing by 0.05pc. Prices of most zinc grades are under pressure currently with demand slightly taking a hit in some regions in India while other regions are driving demand. Overall, zinc prices are moving in line with LME levels and maintaining a parity with supply and demand.
The Davis Index for Zamak #3 settled at Rs242,246/mt del India consumer, down by Rs1,654/mt on Monday from the preceding week. Prices dipped for zinc alloys in line with raw material prices, i.e primary zinc. The Davis Index for Zamak #5 fell by Rs1,654/mt Monday to Rs245,246/mt del India consumer from the previous week. Markets for Zamak #3 and Zamak #5 weakened as spreads for the indexes contracted slightly from the week prior by 0.15pc.
Imported zinc scrap
The weekly Davis Index for new zinc diecast settled at $2,498/mt cfr India port, down by $22/mt from the week prior. Prices dropped on the back of a dip in LME levels. The market for new zinc diecast strengthened with spreads for the price index narrowing by over 0.6pc from a week ago while the index fell by a marginal 0.87pc in a week.
($1 = Rs73.2)