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

Demand for lead battery scrap and secondary lead ingot improved in June on the back of ramped up production of new batteries influenced by seasonal demand from end users in India. 


The official three-month LME lead contract gained $115/mt and settled at $1,801/mt on June 30 from June 1, projecting a global demand improvement for the metal. Spread analysis, however, shows that the Indian market for lead has weakened with LME slowly reaching January high levels.  


In India, market demand for secondary lead ingot improved on the back of major battery makers resuming production. July marks the end of seasonal demand for UPS and inverters, ahead of monsoon. During the nationwide lockdown, demand for industrial batteries expanded over the period. These factors led prices of secondary lead ingot to increase by approximately Rs7,000/mt ($93/mt) to Rs142,000/mt ex-works Mumbai producer and by Rs4,833/mt to Rs139,000/mt ex-works Delhi producer as on July 1 from June 1.  


The Davis Index for secondary lead ingot in Delhi rose by Rs4,833/mt in a month from June 1 to Rs138,783/mt ex-works producer. Industrial activities increased, lockdown was gradually lifted, some labourers returned to work and auto sales improvement, pushed demand for secondary lead ingot and consequently demand for battery scrap in Delhi.  




In Mumbai, lockdown lead to pent- up demand which was higher than in Delhi as the former has a larger number of manufacturers and dealers. Usually, prices in Delhi are higher than Mumbai for both scrap and secondary ingots, but COVID-19 and the resultant lockdown created anomalies. 


Market participants also said that June couldn’t be compared to any previous months. COVID-19 has brought with it a plethora of difficulties in terms of health and running businesses, which affected efficiency, profits, demand, supply and supply chain. 

Business activities are expected to go back to normal in September quarter, opined several market participants, while some said it could take longer.  


Demand for lead battery (drained) also increased as smelters responded to improved demand from end users and stocked up on battery scrap. The prices of battery scrap, however, were marginally up across the month compared to secondary lead ingots, making the position for smelters profitable. 


Prices of battery scrap was up by 1-2pc in India while ingots rose by 4-5pc in June. The Davis Index for lead batteries (drained) in Mumbai settled at Rs82,214/mt del consumer, up by Rs1,851/mt on July 1, projecting a 2pc growth. The Index for Mumbai settled at Rs80,617/mt, up by Rs667/mt or 1pc on July 1, from June 1.





Domestic prices of lead relative to LME failed to reach that level. Spreads for battery scrap in India has widened, reflecting a weaker market for the grade. Spreads have widened by 2pc in Mumbai and Delhi, despite prices rising domestically. 


Spreads for secondary lead ingot has narrowed, 3pc in Delhi and 1pc in Mumbai, projecting a weaker market in India. 


The WBMS data released in June suggested that between Jan-April, lead deficit has increased to 83,000mt. In 2019, lead deficit stood at 237,000mt as refined lead production fell in 2019. 


Global refined lead production fell by 4.6pc to around 3.9mn mt in the first four months of the year as compared to the same period in 2019 in tandem with decreased demand from China and the US. In April alone, refined lead production was reported at 1.02mn mt and demand was slightly higher at 1.06mn mt. Lead demand globally is increasing.


There is a positive sentiment in the markets as LME is gradually climbing. Its year-to-date high was on Jan 16 at $2,026/mt and lowest was on May 15 at $1,598/mt. As of July 8, the official three-month LME settled at $1,831/mt, slowly inching towards January levels.  



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