The lead scrap market remained stayed shut due to the nationwide lockdown in India, now extended till May 3. The Davis Index for lead batteries (drained) remained unchanged at Rs83,725/mt ex-works Mumbai consumer.
The government has now permitted “essential services” to resume from April 20, including construction in “safe zones”. The Davis Index for lead batteries (drained) settled flat at Rs83,725/mt ex-works Mumbai consumer and Rs84,133/mt ex-works Delhi consumer, flat on Wednesday, as markets stayed closed. The market scenario for lead remains unchanged.
Smelters have shut operations due to absence of demand. Even after operations resume, logistics could remain hampered. Tyre manufacturing and auto companies, two major downstream lead industries also remain shut. Market participants, however, believe that as soon as markets re-open, there will be an upward push in demand for scrap.
The Davis Index for secondary lead ingot settled flat at Rs139,500/mt, ex-works Mumbai producer and at Rs140,967/mt, ex-works Delhi producer on Wednesday. Considering the lockdown extension, participants believe that it would now take over six months for businesses to stabilise. Furthermore, they believe that if demand suddenly rises when markets re-open there could be a scarcity of supply for several weeks due to shuttered scrap yards. The situation could be assessed post April 20, said, traders.
The three-month official LME lead contract settled at $1,707.5/mt on Tuesday from $1,707/mt the Tuesday, the prior week. The three-month official LME lead contract rose by $70/mt as on April 14 from March 24. Indian primary lead manufacturers could raise prices following a rise in LME when markets reopen. Primary lead prices have remained unchanged since March 19 at Rs150,100/mt.