Lead scrap prices in Delhi and Mumbai moved in different directions with Delhi prices down and Mumbai prices increasing in response to a shortage of material in the market amid the shutdown of smelters. Delhi prices fell as followed by lower bids in the market on Wednesday which was met with lower offers to induce demand.
Prices moved much in sync with domestic supply and demand rather than LME levels on Wednesday, noted market participants. The official three-month LME lead contract settled at $2,182/mt on Monday, up $37/mt from a week ago which should have ideally pushed scrap prices up, however, prices fell in Delhi amid slow demand.
The weekly Davis Index for secondary lead ingot for Delhi fell Rs2,142/mt to settle at Rs161,475/mt ($2,207/mt) ex-works producer pressurized by a dip in bids and offers but failed to encourage trades. The weekly index for Mumbai’s secondary lead ingot settled at Rs158,317/mt ex-works producer, up by Rs4,628/mt on Wednesday, bridging the price gap between Delhi’s secondary lead ingot. Prices are chiefly up in Mumbai followed by the withdrawal of bids from several market participants to the extension of lockdown.
Smelters in Mumbai are struggling to continue work under lockdown with a shortage of labourers and an increase in COVID-19 cases. Battery dismantling and smelter operations require skilled workers, who are presently skipping work amid fear of COVID-19 infection.
The Davis Index for lead batteries (drained), Wednesday, in Delhi settled at Rs92,560/mt del Delhi consumer, down by Rs3,557/mt followed by a dip in secondary lead ingot prices. Scrap prices fell in Delhi followed by lower bids from smelters which pressured scrap prices. The weekly Davis Index for lead batteries (drained) in Mumbai settled at Rs93,390/mt del Mumbai consumer, up by Rs3,065/mt driven by a shortage of material and higher secondary lead ingot prices.
Secondary lead ingot consumers said that domestic demand for end-user products is slowly picking up while they are focusing on exports. Demand from battery manufacturers have, however, fallen to 75pc under the lockdown, noted refined lead producers from Delhi.
Mumbai markets on Wednesday strengthened in terms of spreads owing to a dearth of material supporting prices. On the other hand, Delhi markets weakened in terms of spreads due to sluggish demand. Several market participants in Delhi believe that the recent hike in prices was unreasonably hiked and the current prices are still trading on the higher end.