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

Zinc scrap and ingot prices rose in the week as demand from local consumers improved. A rise in the LME zinc contract also aided prices. The official three-month LME zinc contract increased by $55/mt or 2pc from the prior week to settle at $2,554/mt on Friday. Markets for most scrap grades strengthened as indicated by spreads for zinc alloys and scrap.


New Zinc Diecast

The weekly Davis Index for New zinc diecast settled at $1,903/mt cfr India port, up by $65/mt. Amid a shortage of material from the US, importers explored other markets to obtain lower rates. The middle eastern market at present is a lucrative option. This, mainly since US-origin scrap prices have hit an eight-month high. The market for new zinc diecast in India strengthened slightly as indicated by the narrowed spread for scrap by around 1pc amid a rise of almost 4pc in import prices. 


Zinc Dross

The Davis Index for zinc galvanizer’s dross settled at Rs162,500/mt ($2,212/mt), up by Rs8,750/mt ex-works Mumbai producer on Monday from the prior week. Prices rose as oxide manufacturers filled up inventories before floods disrupt the supply chain further in the city. 


The Davis Index for zinc galvanizer’s dross in Delhi increased by Rs4,458/mt to Rs166,333/mt ex-works producer on a healthy flow of orders from end-users across North India. Tyre manufacturers have ramped up production thus spurring demand for zinc oxide, with a bearing on dross demand. 


Additionally, a shortage of dross has also driven galvanizers to raise offers in Mumbai and Delhi markets. Orders for galvanizing too have improved and so has the price of Special High Grade (SHG) zinc, the basic raw material for galvanizing. The market for dross strengthened as spreads narrowed by 3pc in Mumbai and 1pc in Delhi from the week prior. 


Secondary Zinc Ingot

The Davis Index for secondary zinc ingot in Mumbai increased by Rs1,750/mt to Rs168,250/mt ex-works consumer from the week prior while the index for secondary zinc ingot in Delhi rose by Rs2,000/mt to Rs171,750/mt ex-works consumer backed by demand from brass manufacturers in Jamnagar and Delhi. The spread for secondary zinc ingot was unchanged from the prior week although domestic prices rose by a little over 1pc while LME zinc increased 2pc in the same period. 


Zinc Alloy

The Davis Index for Zamak #3 and Zamak #5 both rose by Rs6,500/mt to Rs216,750/mt del India consumer and Rs219,750/mt del India consumer, respectively. Prices have been rising since the past seven weeks driven by a rise in LME zinc and prices of SHG. 


Operation ramp-ups by auto die casters and forging companies helped bolster demand for zinc alloys. Several auto diecast part manufacturers in the south have received healthy orders for zinc diecasting, resulting in a strong demand for Zamak#3 and Zamak #5.


Domestic zinc alloy prices for both, Zamak#3 and Zamak #5 have hit an eight-month high. Further, LME zinc also reached a one-year high at $2,554/mt on August 28. The market for zinc alloy strengthened in India as spreads widened by 1pc from the prior week.


Improvement in demand from the infrastructure and the auto sectors could go a long way for the zinc alloy industry. The auto sector in India is gaining momentum with the country seeking to be self-reliant. As a result, prices for most zinc grades are hovering on the higher end. Prices, however, may not sustain given the hit taken by the economy on the account of Indo-China border tension and the growing COVID-19 cases. 

Market participants are wary of market facing blues if domestic demand fails to remain supportive. Manufacturers are also informing of employees contracting COVID-19 which is hampering production. Problems in logistical services are contributing to supply chain disruptions amid monsoons. Logistical charges have thus registered an uptick. 



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