The Davis Index for secondary zinc ingots Monday remained flat at Rs159,700/mt ($2,094/mt) ex-works Mumbai consumer and Rs159,950/mt ex-works Delhi consumer from the prior week as trades remain halted.
The Indian government is gradually lifting the restrictions imposed to curb the spread of COVID-19 pandemic. Some sectors and industries operating in non-COVID-19 infected regions have partially or fully resumed operations. The zinc scrap market has not yet received any notification to resume operations and market participants are expecting some positive announcement on May 3, the last day of the lockdown.
Smelters have enough inventory to cater to any immediate demand from the downstream sectors if the markets reopen on May 3. During the lockdown, smelters had shut production and were only following up pending payments that are to be cleared by their consumers.
The zinc market is going through a rough patch amid the lockdown with normal business activities on hold for more than a month. If the lockdown is extended beyond May 3, the situation would worsen. Smelters and galvanizers have voiced concerns that if they are unable to restart soon, piling losses could affect continuity of business.
The lockdown in Mumbai is anticipated to be extended for another two weeks due to an increase in the number of COVID-19 cases and many areas being designated as hotspots. This has dampened market sentiment in the region. Galvanizers have shut shop and no dross is being sold or demanded by oxide manufacturers. Some tyre companies have resumed operations but are unlikely to be in the dross market till their inventories are sold. Sales also depend on auto dealerships reopening shops.
Prices of zinc dross in India also remained flat with the weekly Davis Index for galvanizer’s dross at Rs146,325/mt ex-works Mumbai producer on Monday, while the index for Delhi at Rs150,783/mt ex-works producer flat from the week prior.
Even if the lockdown is lifted by the end of this week, it will take at least two weeks for markets and industries to reopen. Manpower shortage, supply disruptions due to logistics challenges will cause delays in the resumption of production at smelters.
The Davis Index for new zinc diecast Monday settled at $1,456/mt cfr India port flat from the week prior. No imports were recorded as the local market is shut.
The three-month official LME zinc contract fell by $72/mt and settled at $1,874/mt on Friday from $1,946/mt from the prior Friday. The Davis Index for Zamak #3 settled flat at Rs170,533/mt del India consumer and the index for Zamak #5 settled at Rs174,033/mt del India consumer, flat from the week prior.
No Zamak trades were recorded as both producers and consumers remained shut amid strict curfew orders. Small and medium enterprises have urged the government to provide reliefs and subsidies to compensate for lost business and low demand environment due to the pandemic.
($1 = Rs76.23)