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

Secondary lead ingots demand in major Indian cities is stable with no significant increase in purchases, yet, prices jumped sharply every week in December. Offers rose with LME gains but resisted a fall when LME slid with spreads widening by more than 3pc in Delhi and Mumbai.


Prices are up by almost 4,500/mt ($61.3/mt) as of the first week of January compared to December. LME settled at $2,059/mt as on Jan 5, down by $14/mt or 1pc from early December. Prices of lead scrap and ingots should have ideally fallen in line with LME. The Davis Index for secondary lead ingots in Delhi settled at Rs151,772/mt ex-works producer on Jan 9, up by Rs4,389/mt from the prior month levels despite trades in usual volumes amid no significant increase in demand. 


In India offer are rising in line with LME levels but are not mirroring a fall when LME slides. Market participants are stunned by these price movements in the absence of a clear reason for the change in prices.


Prices in Delhi are always the first to jump up on speculations, said a Mumbai-based smelter, adding that if LME levels stay bullish, lead scrap prices will go up and so will secondary lead ingot. Demand in India is likely to remain stable till March, he noted. 


The Davis Index for secondary lead ingot in Mumbai settled at Rs149,222/mt ex-works producer up by Rs4,222/mt from a month ago. Domestic prices rise seasonally in March but there is a lot of uncertainty this year with COVID-19 pandemic still causing disruptions. Some market participants fear that if a lockdown is announced, lead prices might crash. Global cues are negative with high COVID cases and renewed lockdowns in the UK and Europe. Smelters and traders believe these price gains seem to be speculation-based arising from a fear of lockdowns in India too. 


Markets in a month have strengthened in terms of spread for lead grades. The spreads for Delhi secondary lead ingot index have widened by 3.55pc from the previous month while the spread for secondary lead ingot Mumbai index expanded by 3.78pc from a month ago. The rise in offers are not directly in line with LME or market demand but driven by stable demand and expectation of higher prices in the next few weeks. 



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