Indian zinc scrap and ingot prices failed to rise this week in line with the $109/mt rise in official three-month LME zinc contract from the week prior. LME zinc contract rose to $2,311/mt on Friday. Domestic prices rose by Rs175-450/mt ($1-6.2/mt) depending on grades. 

 

New zinc diecast

Import prices rose driven by increased demand from China. Indian importers Monday imported new zinc diecast at index price. The weekly Davis Index for new zinc diecast rose by $36/mt to settle at $1,786/mt cfr India port up from the week prior. Demand from secondary ingot makers has improved across India. Some importers are bidding at $1,700-1750/mt cfr India port.

 

Markets for new zinc diecast in India weakened with spreads narrowing by approximately 2pc from LME compared to the prior week spreads. Prices did rise but not quite in line with the LME zinc’s higher gains.

 

Zinc dross

In Mumbai, the Davis Index for galvanizer’s dross Monday rose by Rs450/mt to Rs152,250/mt ex-works producer with improved demand in the city as consumers restocked inventories ahead of lockdown uncertainties and logistics delay due to water logging in monsoon. Demand from oxide makers improved in some regions in the country with tyre and paint companies ramping up production. Some oxide sellers in the west are ramping up production to export zinc oxide, which is in high demand. This is keeping domestic prices in check for oxide and impacting dross markets. 

 

Oxide manufacturers cannot import top and bottom dross, despite competitive pricing, due to restrictions on imports. This is supporting dross demand in the domestic market and galvanizers have raised offers for five consecutive time this week. The Davis Index for galvanizers dross in Delhi rose by Rs116/mt to Rs152,783/mt ex-works producer on the back of healthy trades from the prior week. Buying from traders in the North is supporting galvanizers dross prices in Delhi. As LME is headed north, traders expect prices to slowly rise. Delhi market was closed on Monday on the occasion of the Indian festival of Rakshabandhan, but trades took place. 

 

In Delhi, the market for dross weakened as spreads widened by almost 4pc from LME compared to prior week’s spreads. Similarly, the market for dross weakened in Mumbai too as prices rose by less than 1pc and spreads widened by more than 4pc from LME zinc compared to the prior week. 

 

Secondary zinc ingot

The Davis Index for secondary zinc ingot in Delhi Monday rose by Rs400/mt to Rs160,900/mt ex-works consumer from the week prior as demand from brass makers and galvanizers improved. The Davis Index for secondary zinc ingot in Mumbai rose by Rs75/mt to Rs163,075/mt ex-works consumer from the earlier week. 

 

Secondary ingot producers said that demand is gradually improving but the renewed lockdowns have hampered growth amid disruptions in supply chain and low consumer sentiments. Rise in COVID-19 infections are a huge concern for industries as absence of skilled workers disrupts operations and production.

 

The market for secondary zinc ingot weakened with spreads narrowing by 4pc in both Mumbai and Delhi despite domestic prices rising by almost 1pc, however, not in line with LME zinc levels. 

 

Zinc alloy

Zamak #3 and Zamak #5 rose in line with LME gains as raw material prices increased pushing producers to raise offers in the week ending August 3. Demand for Zamak #3 and Zamak #5 has declined from auto sector with the shift to BS-VI vehicles. However, demand from infrastructure sector remains strong. The Davis Index for Zamak #3 Monday settled at Rs197,264/mt del India consumer up by Rs3,785/mt from the prior week and the index for Zamak #5 also rose by Rs3,631/mt to 200,015/mt del India consumer.

 

Die-casters in India are hopeful of good demand for zinc diecast with the improved auto sales reported in July and the expected grow in August. Prices of Special High Grade (SHG) also rose said Zamak producers. SHG prices are at Rs198,200/mt up in line with LME zinc. Demand from infrastructure sector is supporting Zamak prices, said producers, while sales to auto sector consumers is still slow. 

 

Spreads for Zamak narrowed by 3pc, projecting a weakened market for the alloy in India despite prices rising by 2pc, domestically. 

 

Demand for zinc in India is likely to rise with the easing of the second round of lockdowns. Disruption of supply chain and lack of labourers is impacting production, said market participants, who remain wary of domestic demand in the coming months. Several market participants are looking for export markets for ingots amid lower domestic demand.

 

($1=Rs75.01)

Leave a Reply

Your email address will not be published.