Domestic lead scrap and ingot prices on Wednesday inched up on a climb in LME lead on Monday. Sellers marginally raised asking prices from last week. Demand in both, Delhi and Mumbai, has the potential to improve with lockdown limitations eased, stated market participants.
The official three-month LME lead contract settled at $2,173/mt down by $12/mt from a week ago or by 0.55pc. But on June 21, lead prices jumped by $27/mt on LME in a day, aiding market players to increase offers.
The Davis Index for secondary lead ingot in Mumbai settled at Rs160,500/mt ($2,162/mt) ex-works producer, up by Rs350/mt also on a gradual improvement in trading. The Davis Index for lead batteries (drained) rose by Rs17/mt to Rs94,000/mt del Mumbai consumer. Smelters, which were forced to either stay shut or reduce production, could resume and ramp up operations.
Mumbai and Delhi markets weakened in terms of spread for both ingot and scrap, as demand is still low. Sellers believe the increase in LME lead offers more room to raise their asking prices, but restricted demand resulting in lower bids kept the index almost unchanged from the prior week.
Prices in Delhi rose by Rs200/mt and 400/mt for scrap and ingot, respectively, driven by improved trading on an uptick in demand from battery manufacturers. The Davis Index for secondary lead ingot for Delhi settled at Rs161,000/mt ex-works producer, up by Rs210/mt from the preceding week. The Davis Index for lead batteries (drained) on Wednesday settled at Rs92,975/mt del Delhi consumer, up by Rs435/mt as inquiries from smelters in the city increased.
Seasonally, it is high demand season for batteries used in inverters, and UPS. Manufacturing firms, therefore, want to ramp up production to meet this demand. Export demand has also revived.
Demand for auto and industrial batteries, as automakers ramp up production, will support raw material prices. Consumption could rise in the coming weeks as soon as markets return to optimum capacity utilization.