Domestic lead prices across grades rose for the second straight week driven by a rise in LME lead official contract. Price growth in Delhi exceeded that in Mumbai. Offers in Delhi and Mumbai were higher while on the back of LME while demand remained sideways. The official three-month LME lead contract on Tuesday settled at $2,122.5/mt, up by $33.5/mt, or up 1.60pc in a week. Markets weakened in Mumbai and Delhi for all grades in terms of spreads.
Secondary lead ingot and lead batteries (drained) prices increased this week. The weekly Davis Index for lead batteries (drained) on Wednesday settled at Rs93,333/mt ($1,282/mt) del Delhi consumer, up by Rs1,333/mt driven by firm demand and higher LME levels. Market weakened for the grade with spreads for the price index widening marginally by 0.09pc compared to prior Wednesday.
Hike in lead batteries (drained) prices resulted in smelters, producing secondary lead ingots, to raise their prices too. The weekly Davis Index for secondary lead ingot in Delhi on Wednesday settled at Rs158,500/mt ex-works producer, up by Rs1,000/mt. Demand has not changed significantly. The market for secondary lead ingot in Delhi weakened with spreads contracting by 1.34pc for the price index.
In Mumbai, demand weakened resulting in prices not climbing in line with the rise in LME levels. The weekly Davis Index for lead batteries (drained) settled at Rs91,500/mt del Mumbai consumer, up by Rs389/mt, driven by LME. With the auto sector temporarily suffering shutdowns amid a shortage of semiconductors, demand for batteries has taken a hit. The slumping auto demand was, however, offset by firm demand from commercial UPS and telecom segments. The weekly index for secondary lead ingot in Mumbai settled at Rs153,889/mt ex-works producer, up by Rs389/mt.
The market for lead in Mumbai weakened in terms of spreads despite a hike in prices. Spreads for secondary ingot in Mumbai contracted by almost 1.34pc while spreads for lead batteries (drained) widened by 0.69pc from prior Wednesday.
Demand in Delhi and Mumbai is projected to gradually dip with the current auto sector situation. Exports of new batteries will also take a hit if the global semiconductor shortage persists, which could result in lower secondary ingot and battery scrap demand.
($1 = Rs72.8)