Trades in both Mumbai and Delhi were very thin on Monday as markets are almost shut owing to rising COVID-19 cases and strict norms set by the government. Primary zinc ingot prices were revised downwards in sync with a dip in LME zinc levels. Markets for most grades strengthened in terms of spreads.
The official three-month LME zinc contract settled at $2,818/mt, down $58/mt or 2.02pc from the prior week. Revision in primary zinc ingot prices resulted in lower offers for some grades of zinc alloys and dross.
Demand in Delhi and Mumbai were low but manufacturers in Delhi reported some demand from other cities. Secondary zinc ingots were in demand in Uttar Pradesh which prompted manufacturers to raise offers despite low demand in Delhi. Demand is expected to rise slowly in Delhi after the lockdown eases and the market normalizes.
The Davis Index for secondary zinc ingot in Delhi settled at Rs199,200/mt ($2,584.62/mt) ex-works consumer, up by Rs2,083/mt from the previous week driven by increased demand from brass manufacturers outside the city. The market for the grade strengthened in terms of spreads which widened by 3.04pc from the previous week.
The weekly Davis Index for zinc galvanizer’s dross in Delhi settled at Rs193,200/mt ex-works producer, down Rs83/mt, almost flat from the prior week on thin trade. The market for the grade strengthened in terms of spreads which narrowed by 1.97pc from the prior week.
Lockdown in Delhi has been extended for another week amid a sharp spike in new COVID-19 cases reported in the city and a near collapse of healthcare infrastructure burdened by increased numbers of critically ill patients. Business sentiment has weakened but the same is not reflected in prices. If demand slides further as cases keep rising, prices could be pressured next week, traders said.
The Davis Index for zinc galvanizer’s dross, Monday, settled at Rs184,200/mt ex-works Mumbai producer, down Rs750/mt as offers fell amid a drop in demand due to a substantial uptick in COVID-19 infections in the city and the state of Maharashtra. Market participants are facing supply-side issues. Cases are slowly dropping but the city is under several new restrictions including a ban on inter-city travels which has hampered trade.
The Davis Index for secondary zinc ingot on Monday settled at Rs191,200/mt ex-works Mumbai consumer, down Rs1,375/mt from the prior week. Mumbai-based manufacturers reduced offers in line with a dip in LME zinc and worsening local market conditions weighing on demand. The market for the grade in terms of spreads, however, widened by 1.56pc from the prior week despite falling prices.
New zinc import
The Davis Index for new zinc diecast on Monday settled at $2,341/mt cfr India port, down 51/mt on slow demand. Some offers were heard at around $2,200-2,300/mt. Lower demand from secondary zinc ingot makers and secondary alloy manufacturers have impacted trade. Market participants are wary of lockdown extensions and are waiting for the restrictions to be eased before placing new orders.
The Davis Index for Zamak #3 on Monday settled at Rs244,750/mt del India consumer, down by Rs2,675/mt in line with a drop in raw material prices. Primary zinc prices fell by almost Rs2,000/mt from the previous week. The Davis Index for Zamak #5 on Monday settled at Rs247,688/mt del India consumer down by Rs2,734/mt from the prior week.