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

Industrial activities resumed in India on Monday as the government lifted most of the restrictions imposed due to COVID-19 pandemic. Major zinc scrap markets, including those in Delhi and Mumbai, were operational after more than two months. Zinc scrap prices were mixed with prices of import new zinc die-cast up, while prices of dross dipped from the prior week. The weekly Davis Index for galvanizer’s dross settled flat at Rs146,325/mt ($1,937/mt) ex-works Mumbai producer, while the index for Delhi settled at Rs145,000/mt ($1,919/mt) ex-works producer down by Rs5,000/mt from the prior Monday. 


Market participants expected dross prices to fall this week as offers failed to meet bids in markets across India, forcing galvanizers to lower prices. Delhi galvanizers dropped offers, while Mumbai-based galvanizers are yet to receive any offers. Next week, we will get a clearer price direction, said galvanizers in Mumbai, however, dross could follow Delhi prices. Zinc oxide manufacturers remained silent this week as they awaited better offers. Bids were heard at around Rs135,000/mt in western India. Oxide manufacturers rued that production is reduced in the absence of skilled labourers who have returned to their hometowns and new hiring is not feasible in the current economic conditions.


Galvanizers in Delhi and Mumbai, who buy secondary zinc ingots, have resumed operations. In June production will be limited as companies are starting up slowly and will need time to ramp up operations, said Mumbai-based galvanizers. Orders for galvanizing are just creeping in as several stalled construction works have resumed. This could give a rise to sheet galvanizing and in turn boost demand for secondary zinc ingots in the near term. The Davis Index for secondary zinc ingots rose by Rs1,000/mt to Rs167,000/mt ex-works Delhi consumer, Monday from the week prior as more and more galvanizers opened shop. The Davis Index for secondary zinc ingot for Mumbai settled higher by Rs300/mt to Rs160,00/mt ex-works consumer as few trades closed. 


Import prices of new zinc diecast rose by $179/mt Monday to $1,620/mt cfr India port from the prior week as the official LME Zinc contracts remained on the higher side. Domestic demand from secondary lead ingot producers increased across India pushing for more scrap supply. There is a lot of volatility in the import market, said scrap importers.


Zinc scrap demand could rise marginally by the next week as major scrap markets including Delhi, Aligarh and Mumbai are now open for business and would be making up for the lost time during COVID-19.


Zinc Alloy

Diecasters have resumed operations across India but very few trades were heard. The Davis Index for Zamak #3 settled at Rs183,500/mt del India consumer, flat from the week prior and the index for Zamak #5 settled at Rs186,500/mt del India consumer, also flat. 


Diecasters are facing labour shortages which has hampered production. Demand for diecasting will improve with the revival in auto sales. In South, diecasters whined about lower demand while in west diecasters were more positive as their markets resumed just recently. 


Primary zinc manufacturers in India have revised their prices for SHG (Special High Grade) to more than Rs180,500/mt, up by Rs5,200/mt from June 1. Primary manufacturers mirror the official three-month LME zinc contract which was up by $75/mt to $2,042/mt on June 5 from $1,967/mt on May 29. Zamak producers use SHG as raw material and prices could rise in the coming week as LME Zinc and SHG prices are heading north. 


($1= Rs75.53)

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