Domestic zinc scrap and ingot prices, Monday, rose across grades in India lifted by high offers due to various factors including a gradual rise of LME zinc, which was up $100/mt from the prior week. There is a shortage of dross in Mumbai due to low orders for galvanizing steel. Demand is subdued with the announcement of lockdown measures in several states amid a rise in COVID-19 cases.
The official three-month LME contract on Friday rose to $2,918/mt up by $100/mt from the prior week which is why primary zinc prices were revised upwards which in turn boosted offers for scrap prices despite low demand. In both Delhi and Mumbai, markets weakened in terms of spreads compared to the previous week despite a jump in indexes, however, LME levels rose 3pc while most domestic indexes rose under 2pc. The exchange rate on Monday improved slightly compared to the prior week at Rs74.11 against the US dollar. On prior Monday it was Rs74.75 against the dollar.
The Davis Index for zinc galvanizer’s dross in Delhi rose to Rs195,367/mt (2,636/mt) ex-works producer, up by Rs2,167/mt as producers hiked offers in the city. The market for the grade weakened in terms of spreads which widened by 1.38pc from the preceding week.
The Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs188,075/mt ex-works producer, up by Rs3,875/mt from prior Monday’s levels. Galvanizer’s are selling lower quantities at higher prices as there is material shortage while dross buyers are not risking investment in larger quantities as market uncertainties are high given the lockdown. The market for the grade in Mumbai also weakened as spreads expanded by 0.48pc from the prior week.
Secondary zinc ingot
The Davis Index for secondary zinc ingot rose by Rs338/mt to Rs199,538/mt ex-works consumer compared to the preceding week on higher offers in line with primary and LME levels. Demand from brass manufacturers was limited on Monday. Market participants are primarily in a wait and watch mode as raw material prices are high and end-user demand uncertain. Delhi market weakened in terms of spread for the grade as spreads contracted for the secondary ingot by 2.30pc from the prior week. The Davis Index for Mumbai’s secondary zinc ingot rose by Rs3,500/mt in a week to Rs194,700/mt ex-works consumer. Mumbai market weakened for the grade in terms of spreads which narrowed by 0.74pc from the week prior.
Import orders of new zinc diecast took a hit on Monday with very few trades heard. The Davis Index for new zinc diecast settled at $2,347/mt cfr India port, up by $6/mt. Some offers were heard between $2,300-2,400/mt cfr India port on Monday, however, trades thinned as demand from secondary ingot manufacturers is extremely low. The market for the grade weakened as spreads widened by 2.64pc from prior Monday.
The Davis Index for Zamak #3 on Monday jumped to Rs249,500/mt del India consumer, up by Rs4,750/mt driven by a rise in LME levels and primary zinc prices. Demand from consuming sectors is low but prices of zinc alloys were hiked by manufacturers following an uptick in primary zinc prices.
On Monday, primary zinc prices heard at Rs237,000-247,800/mt up by almost Rs6,000/mt from the preceding week. Scrap prices may rise further influenced by higher primary zinc prices.
The Davis Index for Zamak #5 on Monday settled at Rs252,500/mt del India consumer, up by Rs4,812/mt from the prior week on high offers. The market for both the zinc alloys weakened in terms of spreads contracting by 0.82pc from the prior week.
($1 = Rs74.11)