Secondary lead ingot market improved in terms of trades in Mumbai and Delhi as demand improved but it decayed scrap this week. Market for lead in the major cities has weakened with spreads contracting for ingots and widening for scraps from LME levels compared to prior week. The official three-month LME lead settled at $1,850/mt, up by $17/mt on Tuesday from the prior week.
The Davis Index for secondary lead ingots in Mumbai on Wednesday jumped by Rs2,357/mt ($32/mt) to Rs141,857/mt ex-works producer, as domestic demand is gradually increasing from battery manufacturers. These manufacturers are ramping up production to meet end-user demand during monsoons when people stock on inverters. Smelters are also pushing to produce more ingots to cater to battery makers amid a shortage of labourers which is still causing a massive obstacle in production.
Markets in Mumbai for lead scrap has weakened with spreads widening by almost 4pc from LME this week, however, market for ingots has improved with spreads widening by 1pc from LME relative to prior week.
The Davis Index for lead batteries (drained) fell by Rs2,375/mt to Rs78,625/mt del Mumbai consumer on Wednesday from the week prior. In Mumbai several small sized smelters are running on severely low capacity on labour shortages which is pushing prices downwards for scrap. There is a surplus of battery scrap in Mumbai ad in Delhi, paired with lower demand which is squeezing prices.
A similar market was witnessed in Delhi. The weekly Davis Index for lead batteries (drained) fell by Rs2,897/mt to Rs79,214/mt del Delhi consumer on Wednesday while the index for secondary lead ingots in Delhi rose by Rs1,717/mt to Rs140,615/mt ex-works producer from the week prior.
Lead recycling companies said that demand for secondary lead ingots may stagnate in the coming weeks as demand may have reached its peak with battery makers stocking up before the monsoons starts. Many market participants are also exporting healthy amounts of re-melted lead ingots to South-Korea which is also supporting domestic prices.
Market for lead scrap and ingot weakened in Delhi with spreads for scrap widening by 2pc from the prior week and spreads for secondary lead ingots narrowed marginally by less than a percent from the previous week.
Some smelters are in a profitable position with low raw material costs and rising prices of lead ingots. Margins for smelters are increasing with the apparent fall in scrap prices. Scrap prices fell by approximately 3-4pc over the week while prices of secondary lead gained 1-2pc. Primary lead prices were revised downwards by Rs1,900/mt at Rs162,600/mt on Monday from the week prior.
($1=Rs74.81)