In India, domestic lead scrap and ingot prices rose by 1-3pc in the week ended Aug 19 amid a ramp up of production by the auto sector, which is boosting demand for new batteries. The official three-month LME lead prices also rose by 3pc to $1,981/mt, supporting domestic prices. 

 

Lead smelters in Mumbai and Delhi increased output to meet the strong demand from the auto sector. Auto companies expect pent up demand during the upcoming festive season in India. Following a relatively healthy auto sales in July, auto manufacturers have less inventories and need to make up for the production loss during the COVID-19-related lockdown. With demand in sight, smelters are gradually raising offers which have led to a price hike of Rs-3,000-4,000/mt in Mumbai and Delhi, during the week. 

 

Secondary lead ingots

The Davis Index for secondary lead ingots in Delhi Wednesday rose by Rs2,115/mt to Rs143,615/mt ex-works producer from the prior week. Ingot manufacturers are in a sweet spot as prices of remelted lead and refined lead have been rising since mid-July and the price trend would continue if the level of demand sustains, said traders. It has become difficult to corner a margin from imported lead ingot as there only a slight price difference between domestic and imported material. This has resulted in a newfound demand for domestic ingots instilled by ‘Atmanirbhar Bharat’ or government emphasis on self-reliance. Several importers have cut imports post lockdown. The weekly Davis Index for secondary lead ingot in Mumbai Wednesday rose by Rs3,961/mt and settled at Rs145,794/mt from the week prior. 

 

Battery scrap 

Given the high demand for secondary lead ingots, demand for raw material also rose this week. Battery scrap prices remained under pressure for months due to oversupply post lockdown but of recent, prices slowly improved. The Davis Index for lead batteries (drained) Wednesday rose by Rs2,467/mt to Rs81,167/mt del Delhi consumer from the week prior fuelled by demand from smelters in the city. Battery scrap is still found in abundance but positive market sentiments followed by a leap in LME lead price levels have boosted offers. Battery scrap sellers in Mumbai are offering around Rs83,000-84,000/mt which is slightly over our index price but still met with handsome trades on Wednesday. The Davis Index for lead batteries (drained) rose by Rs1,806/mt and settled at Rs82,306/mt del Mumbai consumer Wednesday from the day prior. 

 

Despite a rise in lead scrap and ingots prices the market in Delhi and Mumbai still weakened as the official three-month LME lead climbed relatively higher as it settled at $1,981/mt on Tuesday up by $64.5/mt or 3pc from the prior week. LME lead is almost reaching January high levels and is shy of just $46/mt. On the other hand, domestic prices of secondary lead ingots are still shy of Rs10,000/mt relative to January price levels which were around Rs151,000/mt. There is still room for growth in the domestic market. The market for secondary lead ingot in Delhi weakened as spreads narrowed by 2pc from the prior week and spreads for Mumbai almost remained flat from the week prior. The market for battery scrap in Delhi weakened too as spreads widened by 1pc and for Mumbai, spreads remained flat. Mumbai market is more conducive for lead demand as it is an industrial hub generating healthy demand and supporting the prices. 

 

Primary lead

Prices of primary lead on Aug 13 were revised to Rs170,600/mt up by Rs2,900/mt from the week prior driven by LME lead gains. Prices could be revised upwards in line with improved demand and higher LME lead. Globally, primary lead prices are rising as several major lead miners posted a fall in lead production in the first half of 2020. 

 

($1=Rs74.85)

 

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