Trades of zinc scrap declined this week amid disharmony between offers and bids. Secondary zinc ingot prices recorded a steep decline as brass manufacturers and galvanizers stayed away from trades awaiting clarity in the price direction in major markets.
The Davis Index for secondary zinc ingots fell by Rs7,800/mt ($102.62/mt) to Rs152,200/mt ex-works Mumbai consumer, Monday, from the week prior. Market activities in Delhi resumed last week but consumers of secondary zinc ingots were away from the market as they held enough inventories to last them for the next few weeks.
There is a substantial difference between offers doled out by different mills leaving buyers in major cities like Mumbai and Delhi flummoxed. The difference between offers and bids is also sizable as consumers looked to cut down their input costs. Thus, buyers adopted a wait-and-watch approach as they look to recover from the financial losses and liquidity issues faced by them due to the lockdown. Ingot sellers were reluctant to sell on credit basis amid severe liquidity crunch.The weekly Davis Index for secondary zinc ingots in Delhi fell by Rs10,800/mt to Rs156,200/mt ex-works consumer and trades concluded at the index price.
Despite high offers in the week ending June 7, trades improved for a brief while. But this week, ingot producers looked to realise their piled-up inventories at prices comfortable enough for them to recover previous losses. Downstream consumers, however, stayed away from these offers, forcing many ingot manufacturers to drop offers. The haze over market conditions could lift in July.
The Davis Index for galvanizer’s dross in Delhi settled at Rs144,889/mt ex-works producer, down by Rs111/mt from Rs144,889/mt on the prior Monday. Galvanizers offered competitive prices to meet bids by oxide manufacturers as they reopened in the week ending June 8.
The index for galvanizer’s dross in Mumbai fell by Rs1,325/mt to Rs145,000/mt ex-works producer despite improved demand from oxide producers. Prices in both, Delhi and Mumbai could rise in the near term as dross inventories with buyers have started to dip. Anticipating scarcity of material and a rise in demand, sellers raised offers to Rs150,000-155,000/mt.
Import prices of new zinc diecast declined by $250/mt to $1,370/mt cfr India port on Monday from the prior week as the official LME zinc contract fell over the week. Demand from secondary lead ingot producers is likely to increase across India in the near term. The official LME zinc contract fell to $2,003/mt on June 12 from $2,042/mt in the prior week, a fall of $40/mt.
Zinc Alloy
The weekly Davis Index for Zamak #3 settled at Rs186,167/mt, up by Rs2,667/mt, del India consumer and the index for Zamak #5 settled at Rs189,444/mt, up by Rs2,944/mt del India consumer. Demand for Zamak/Mazak has improved since lockdown was lifted and trades are gradually picking up every week.
Prices of Special High Grade fell by around Rs1,000/mt to Rs179,500/mt on June 15 from the earlier week driven by a fall in the LME prices. Prices of Zamak depend on SHG and thus could come under pressure in the coming days. Die-casters are relying on demand from the auto industry, which is on a mend in June.
($1=Rs76)