The prices of major zinc scrap and ingots in Delhi rose by 1-2pc from the prior week as demand slowly improved in the region. Also, the official LME three-month contract rose by $99/mt on Friday and settled at $2,410/mt from the prior week.
Delhi
The Davis Index for galvanizer’s dross in Delhi rose by Rs3,217/mt ($42/mt) to Rs156,000/mt ex-works producer from the prior Monday on the back of increased trades. Oxide manufacturers are ramping up production in August. Prices were supported by the LME rising consecutively for the last four trading sessions.
Oxide manufacturers said they anticipate high demand from tyre and rubber industries on the back of festive season starting September. Traders are expecting prices to go up further and stocked up both top dross and bottom dross last week. Most galvanizers sold their inventories to traders and are expecting more orders this week. This could support prices in the coming week.
The Davis Index for secondary zinc ingot in Delhi rose marginally by Rs300/mt and settled at Rs161,200/mt ex-works consumer, with persistent demand from brass manufacturers and local galvanizers in Uttar Pradesh who use secondary zinc ingots for galvanizing.
Delhi market weakened in terms of spreads as it widened from LME levels by 2pc from prior Monday for dross and the market for secondary zinc ingot weakened as spreads narrowed by 2pc from the week prior.
Mumbai
The Davis Index for galvanizer’s dross in Mumbai fell by Rs6,107/mt to Rs146,143/mt ex-works producer from the prior Monday amid heavy rains in Mumbai and adjoining areas. Rains hampered trade and logistics, leading to lowered offers which pulled down the index prices.
Mumbai-based galvanizers said rain played spoilsport halting infrastructure activities resulting in low galvanizing orders. However, dross prices could rise as lower production usually leads to a shortage. Galvanizers are keen to sell-off their dross inventories before monsoons make it even more difficult to continue production and delays logistics, this triggered prices to fall in Mumbai. The Davis Index for secondary zinc ingot in Mumbai fell by Rs2,875/mt and settled at Rs160,200/mt ex-works consumer on Monday from the preceding week.
Demand for secondary zinc ingot in Mumbai remains slightly subdued with highways clogged and buyers looking elsewhere to procure the ingots at shorter delivery times. Markets for secondary zinc ingot and dross in Mumbai weakened as spreads narrowed by more than 5pc from the prior week. LME zinc prices are on an uptrend while domestic demand is subdued which is narrowing spreads.
Imports
The Davis Index for new zinc diecast settled at $1,796/mt cfr India port, up by $10/mt on Monday from the prior week. Import prices are unlikely to rise further as the domestic market prices are quite competitive, said importers. Also, high demand from China is cushioning new zinc diecast prices, globally.
Zinc alloy
Zinc alloy prices are rising on the back of high primary zinc prices, which was supported by higher LME zinc prices. The three-month LME zinc contract rose by almost $375/mt in a month and settled at $2,410/mt on Friday. Major zinc mining companies reported a fall in zinc production in June quarter. Peruvian mines are running at a deficit, while zinc mines in Australia are trying to cover up the gap.
The Davis Index for Zamak #3 on Monday settled at Rs203,455/mt del India consumer up by Rs6,208/mt from the week prior and the index for Zamak #5 settled at Rs206,000/mt del India consumer, up by Rs5,985/mt from the prior week.
North India-based Zamak manufacturers said that demand from gas cylinder manufacturers is low. Zamak is used in the production of gas regulators. Also, demand from the auto sector has lowered by 50pc from pre-COVID levels, while infrastructure-related demand has reduced by 40pc. Despite sluggish demand, Zamak producers cannot reduce their offers as prices of raw material are on the rise.
Primary zinc prices were last revised on Aug 6 to Rs201,400/mt ex-works producer, up by Rs7,300 from July 30, shadowing LME zinc contract. Despite a rise in domestic zinc alloy prices, the market for Zamak in India has weakened with spreads narrowing by 1pc each from the prior week.
($1=Rs74.89)