Domestic zinc grades on Monday slid on lower bids in a sluggish market. Prices in Mumbai fell steeper than in Delhi due to the possibility of COVID-19 related lockdown in Maharashtra. Weekly indexes were down despite a rise in LME zinc levels.
The official three-month LME zinc contract on Friday settled at $2,824/mt, up by $57/mt, or 2.06pc, from the prior week which should have prompted offers to rise in domestic markets. On the contrary, low demand has pressured prices in both the cities. Domestic markets weakened in terms of spread across grades.
Prices fell for the second consecutive week. The weekly Davis Index for zinc galvanizer’s dross on Monday settled at Rs190,444/mt ($2,619/mt) ex-works producer, down by Rs1,639/mt, pushed by low bids. Limited trading tool place in the first half of the day. Market for the grade on Monday weakened in terms of spreads which widened by 2.20pc compared to the prior week.
The Davis Index for secondary zinc ingot in Delhi settled at Rs198,667/mt ex-works consumer, down by Rs2,055/mt. Brass manufacturers in the city were bidding around Rs194,000-195,000/mt while offers exceeded Rs197,000-198,000/mt. Market participants said that by March-end, several plants will stop buying scrap for April. Markets for secondary zinc ingot in Delhi weakened in terms of spreads which narrowed by 2.47pc.
The weekly Davis Index for zinc galvanizer’s dross in Mumbai on Monday settled at Rs187,700/mt ex-works producer, down Rs3,133/mt as offers were pushed lower in a low demand market to attract more buyers amid a lockdown scare. Several cities in Maharashtra are already under strict restrictions which has already hit demand. The market for the grade in Mumbai weakened as spreads widened for the price index.
The Davis Index for secondary zinc ingot in Mumbai settled at Rs195,600/mt ex-works Mumbai consumer down by Rs2,400/mt from the preceding week. Prices had fallen in the prior week too by Rs2,000. In two weeks, prices have fallen by almost Rs5,000/mt depicting softening demand. The market for secondary zinc ingot in Mumbai weakened as spreads narrowed by 2.62pc from the week prior.
The weekly Davis Index for Zamak #3 settled at Rs237,750/mt del India consumer, down by Rs83/mt from prior Monday. Prices were almost flat from the prior week as low demand was offset by a weekly rise in LME levels. Several diecasters in west India said that they are not receiving healthy orders from auto sector since the past couple of weeks. Demand was firm, however, from diecasters on Monday in the southern parts of India.
The weekly Davis Index for Zamak #5 dipped by Rs83/mt to Rs240,750/mt del India consumer. Markets for the zinc alloy grades weakened as spreads for both the grades narrowed by over 1.70pc from a week ago. Auto production is hurt as there are several supply issues which is affecting demand for metals used directly by automakers or by auto ancillaries.
The Davis Index for new zinc diecast on Monday settled at $2,590/mt cfr India port, up by $50/mt. Prices should have dropped in line with LME but firm demand globally supported prices. Low trades were heard from Indian importers. Spreads for the price index narrowed by 0.08pc compared to the previous week, representing a weakened market in India.