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

Zinc scrap prices fell in India this week with major cities like Delhi and Mumbai still under lockdown. In the week ending May 22, prices saw an uptick, ending their downtrend from March-end. But market sentiment turned negative after the government extended the lockdown till June 30.

The weekly Davis Index for secondary zinc ingots settled at Rs166,000/mt ($2,197/mt) ex-works Delhi consumer, down by Rs3,000/mt and index in Mumbai settled flat at Rs159,700/mt ex-works consumer, Monday from May 22, as week prior, market remained closed on account of Eid.  


Major consumers of secondary zinc ingots including galvanizers and brass manufacturers in non-containment areas of Mumbai and Delhi are also yet to resume full production and are operating at 15-20pc of capacity. Plants located in red zones of Mumbai and Delhi continued to grapple with a labour shortage and thus remained shuttered. 

Operational smelters could cut production while those closed contemplate restarting in the coming week amid a lack of demand for secondary zinc ingots. Market participants feel the sudden short term rise by 6-9pc two weeks ago is unlikely to persist as indicated by the 5-7pc drop in the last week. Amid these price fluctuations, scrap consumers are unable to make purchase decisions.  


Galvanizers are offering dross at Rs145,000-150,000/mt ex-works consumer in the West, while in the north, prices were heard at Rs150,000-155,000/mt ex-works consumer. In the east, prices were around Rs140,000/mt ex-works consumer. Traders cited high offers resulting in few transactions over the week. Post lockdown, all manufacturers are looking to cut input costs and increase profit margins to mitigate their losses. The Davis Index for galvanizer’s dross settled flat at Rs146,325/mt ex-works Mumbai producer on Monday while the index in Delhi settled at Rs150,000/mt ex-works producer, down by Rs8,000/mt from Rs158,000/mt from May 22. Oxide manufacturers stayed away from these offers thus pressuring prices. 


Delhi has sealed its borders with other states and restricted the movement of people for the next few days which is likely to impact the transportation of goods. Prices are likely to be flat in the coming week in Delhi. Value chains remain hit and market participants feel trades will gain momentum only after the government lifts the lockdown completely. 


The Davis Index for new zinc diecast fell by $104/mt to $1,441/mt cfr India port on Monday from $1,545/mt cfr India port on May 22. Consumers resorted to importing scrap amid limited domestic scrap generation. But buyers reduced their bids due to current market conditions. New zinc diecast trades are expected to increase after the demand for brass and galvanized sheet picks up. 


Zinc Alloy

The Davis Index for Zamak #3 settled at Rs183,500/mt del India consumer Monday, flat from May 22 and the index for Zamak #5 settled at Rs186,500/mt del India consumer, also flat. Zamak buyers in the West and the North are facing issues with goods delivered amid a lack of lorries, most running only for essential services. In South India, some trades were heard. But these too dipped from the previous week. The East Indian markets showed signs of revival as the effects cyclone Amphane have started to wane out. Trades are likely to improve further as auto components manufacturers have started resuming production gradually across India. 


Primary zinc manufactures in India have revised their prices for Special High-Grade Zinc (SHG) to around Rs176,200/mt, down by Rs1,700/mt from May 21. Prices of SHG followed the official three-month LME zinc contract which fell by $77/mt to $1,916/mt on May 28 from $1,993/mt on May 21. In a week, the official three-month LME zinc contract rose by $10/mt to $1,967/mt on Friday. SHG prices could be raised in the near term. 



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