The Davis Index for zinc galvanizer’s dross in Mumbai Monday settled at Rs156,590/mt ($2,139/mt) ex-works producer, down by Rs1,743/mt from the prior week. Offers were revised downwards on Monday for most grades followed by a drop in official three-month LME contract which settled at $2,317.5/mt, down by $62/mt or down by 3pc in a week.
Galvanizer’s in Delhi and Mumbai dropped prices as prices of special high-grade (SHG) zinc fell reducing their input cost. Dross prices also fell which gave oxide makers a good window to refill their inventories ahead of a predicted healthy auto season in Q3. Oxide makers are supplying good quantities of zinc oxide to tyre manufacturers who are ramping up to meet the demand from the auto sector.
The Davis Index for zinc galvanizer’s dross in Delhi Monday settled at Rs162,150/mt ex-works producers down by Rs337/mt from the prior week. Delhi markets strengthened in terms of spread despite a fall in domestic prices. Spreads for dross in Delhi narrowed by almost 2pc from the prior week while LME dipped by 3pc in the same period. Market for dross in Mumbai, however, weakened as spreads widened marginally by 0.02pc for the index with a fall of 3.14pc in domestic prices.
Secondary zinc ingot
The Davis Index for secondary zinc ingot in Delhi Monday settled at Rs164,000/mt ex-works consumer down by Rs2,750/mt from the previous week. Prices declined on the back of LME dipping and demand remaining slightly lower compared to the prior Monday. Over the week, prices fluctuated a lot, said traders as LME zinc too was rangebound. The weekly index for secondary zinc ingot in Mumbai settled at Rs162,150/mt ex-works consumer, down by Rs2,350/mt on Monday from the prior week. Brass manufacturers, who buy secondary zinc ingots to produce brass products, are not so optimistic of a demand revival from the end users. Brass manufacturers have reduced zinc ingot purchases and this could weigh in on prices of zinc ingots in the next few weeks.
The market for secondary zinc ingot in both Delhi and Mumbai improved in terms of spread which widened by 1.45pc and 1.64pc, relatively. The Davis Index for secondary zinc ingot in Delhi dipped by 1.65pc and in Mumbai by 1.43pc in a week while LME slipped by 3pc in the same period. Prices are likely to fall further amid thin trades.
New zinc diecast
The Davis Index for new zinc diecast Monday settled at $1,858/mt, down by $39/mt or by 2.06pc from the previous week. Importers in India are keen on importing scrap from east Asian countries as US and Canada-origin price levels seem too high, said traders. Demand from Indian consumers was weak on Monday compared to the previous week. A decline in LME is worrying traders who have materials waiting at the port. They are looking to sell their inventories before the LME dips further as port charges and the falling rate of new zinc diecast would affect their profitability.
Zinc alloys
The Davis Index for Zamak #3 settled at Rs203,450/mt del India consumer down by Rs8,550/mt from the previous week and the index for Zamak #5 settled at Rs206,450/mt down by Rs8,550/mt from the previous week. Prices dipped with offers being lowered as a result of lower SHG prices. Demand from diecasters remained firm, said manufacturers. With auto sales picking up, manufacturers of zinc alloys are looking forward to producing more in the coming weeks.
Markets for both zinc alloys weakened as spreads contracted by approximately 3.3pc from the previous week with a sharp fall in domestic prices on Monday from a week ago. With low construction activities, diecasters who cater to the infrastructure demand are losing business and rued that demand is severely low and if auto demand fades, markets would witness a lull period.
($1=Rs73.2)