Secondary lead ingot and scrap prices fell in Mumbai amid a rise in COVID-19 infections. Authorities imposed lockdowns in select suburbs of the city to control the pandemic. Spread analysis shows the market has weakened for both scrap and secondary lead ingots. The Davis Index for secondary lead ingot in Mumbai settled at Rs139,117/mt ($1,846.77/mt) ex-works producer, down by Rs3,250/mt from the week prior.
This week marks the end of uptrend in major lead grades. Prices lost steam in Mumbai as demand fell gradually and trades thinned. Smelters and battery makers rued the imposition of lockdown and feared low demand from end users. Traders and battery makers shied away from new deals for secondary lead ingots amid demand uncertainty.
Manufacturers had anticipated a lockdown in early July and refilled their scrap inventories, which lifted prices over the past few weeks. Prices for lead batteries (drained) Wednesday fell by Rs1,375/mt and the Davis Index settled at Rs81,075/mt del Mumbai consumer from a week prior.
Subdued domestic demand and volatile export markets have dampened market sentiments in India despite the uptrend in LME lead prices. The official three-month LME lead settled at $1,858/mt on Tuesday, up by $65.5/mt from the prior week. Domestic prices failed to mirror LME as domestic demand dictated the market.
The pandemic scare failed to influence the markets in the North. In Delhi, there is no indication of a lockdown and businesses are running smoothly, said secondary lead smelters in the region. The Davis Index for lead batteries (drained) in Delhi settled at Rs82,117/mt del consumer up by Rs617/mt on Wednesday as scrap dealers raised offers amid an uptick in end-user demand. Trades concluded at index price.
The Davis Index for secondary lead ingot in Delhi Wednesday settled lower by Rs83/mt at Rs139,000/mt ex-works producer from the week prior. Traders indicated that in the coming weeks prices could move sideways or dip slightly.
Delhi market for battery scrap shows weakness as spreads for the same widened by 2pc from the previous week and the spread for secondary lead ingot narrowed towards LME by over 3pc, projecting a weaker market. Similarly, Mumbai market for lead weakened as spread for lead battery (drained) widened by 3pc and spread for secondary lead ingot narrowed by 5pc. Lead market in Mumbai is relatively weaker than markets in Delhi.
Domestic prices failed to gain in terms of LME and also the rupee depreciated marginally to Rs75.33 against the dollar Rs74.95 in the prior week, affecting spreads.
India’s primary lead producer Monday raised prices to approximately Rs165,100/mt, up by Rs5,400/mt from the prior week in line with LME. The LME lead three-month contract is on an uptrend since July 3 when it settled at $1,770/mt indicating an improvement in global demand for primary lead. However, lead markets in India will be governed by the spread of the pandemic and the steps taken by the government to address the stress faced by the economy in the near term.
($1=Rs75.33)