In the week ending Oct 28, prices of most lead grades rose by 1-3pc except secondary lead ingot in Mumbai which fell marginally by 0.5pc from the previous week. During the same period, the official three-month LME lead contract rose 1.64pc ot $29/mt to close at $1,797/mt on Tuesday.
The weekly Davis Index for lead batteries (drained) in Mumbai Wednesday settled at Rs82,167/mt ($1,114.28/mt) del consumer, up by Rs2,667/mt driven by healthy demand from smelters supplying to battery manufactures. Demand from smelters has been stable throughout October which supported prices of battery scrap in Mumbai.
The weekly Davis Index for secondary lead ingot in Mumbai Wednesday settled at Rs141,167/mt ex-works producer, down by Rs583/mt. Raw material cost has gone up in Mumbai but smelters did not raise offer prices for secondary lead ingots in a bid to clear inventories before the end of festive season. Prices may rise in the following week if battery scrap prices further increase. Domestic and imported prices of secondary ingots are fairly close, a rise in domestic prices is expected to push battery makers to import.
The market for battery scrap in Mumbai has strengthened in terms of spread which contracted by 0.86pc from the prior week. The index for the same rose by 3.35pc while LME lead rose 1.64pc in a week. However, the market for secondary lead ingot weakened with spreads narrowing by 2pc from the prior week. Domestic secondary ingot manufacturers carry the potential to increase offers if LME maintains its climb.
In Delhi, the weekly Davis Index for lead batteries (drained) Wednesday rose by Rs779/mt to Rs80,779/mt del consumer driven by rise in demand from smelters. Prices in October have moved in a very narrow range for scrap and ingots as there is no major thrust in the market to influence prices.
The weekly Davis Index for secondary lead ingot in Delhi rose by Rs154/mt on Wednesday and settled at Rs141,279/mt ex-works producer. In Delhi, prices of battery scrap and ingots were in sync as both rose unlike in Mumbai. Smelters in Delhi said that demand from battery manufacturers in North India is strong.
The market for scrap and ingot in Delhi weakened as spreads for scrap widened by 0.57pc and spreads for secondary ingots narrowed by 1.93pc from the previous week. In the same week, the index for lead batteries (drained) increased 0.97pc and index for ingots rose by 0.11pc while LME rose by 1.6pc.
Battery manufacturers have been stocking up to cater to the demand from automotive sector, pushing demand for secondary lead ingot since past few months. Market participants noted that market has been in equilibrium in Mumbai and Delhi. Markets might maintain status quo until the end of festive season.