Zinc scrap prices for most grades rose in the last week of June amid increased enquires as smelters secured scrap for ramping up operations in July. In Mumbai, the weekly Davis Index for galvanizer’s dross Monday rose by Rs1,792/mt ($23.72/mt) and settled at Rs146,117/mt ex-works producer from the week prior as demand recovered. The weekly Davis Index for galvanizer’s dross in Delhi rose by Rs3,875/mt to Rs146,950/mt ex-works producer. 

 

Prices in Delhi were relatively higher as galvanizing operations are still to ramp up in the region, resulting in low generations of dross. The market prices are still considered low by galvanizers. Unless construction activities pick up, inventories with the galvanizers will be on the lower side. Galvanizers are producing at a 50pc lower capacity than pre-pandemic levels. 

 

In Mumbai, as the infrastructure sector has gained more momentum, availability of dross is ample, keeping prices flat to slightly up this week. Zinc oxide manufacturers are ramping up production and so are tyre/rubber and paint manufacturers. This will have a positive impact on demand for dross. Prices in July will be more competitive, said traders as manufacturers are still in resumption phase. Demand has picked up compared to lockdown months but there is a lot of room for growth. 

 

 

In Delhi, demand for secondary zinc ingots has slightly fallen from the prior week as galvanizers are hit by a delay in the resumption of government-funded construction projects. The border tensions between India and China have resulted in a slowdown of projects that have Chinese influence impacting the demand for construction material including zinc and steel. Many galvanizers in Delhi are still in resumption phase, while some in containment zones are unable to restart. Shortage of labourers due restrictions on the movement of people is also hampering business activities, said galvanizers. Some secondary ingot producers have dropped production capacity by 60pc as demand is very low. Producers are also struggling with cash flow issues amid delays in payment. 

 

The Davis Index for secondary zinc ingot Monday fell by Rs1,250/mt to Rs154,950/mt ex-works Delhi consumer, while the index in Mumbai rose by Rs750/mt to Rs152,950/mt ex-works consumer from the week prior. Producers have pinned their hope on the revival of demand in July as they remain concerned about the growing number of COVID-19 cases.

 

Import prices of new zinc diecast rose by $31/mt cfr India port as domestic markets strengthened over the week. Imports have slightly risen compared to the same period the prior month, said traders in Jamnagar. Importers perceive prices to go higher as LME has climbed for three consecutive sessions pulling up scrap prices. In terms of spreads, the markets have strengthened and increased by approximately 2pc from a week ago. 

 

Zinc Alloy

Prices of zinc alloy for both Zamak #3 and Zamak #5 dropped Monday amid a decline in demand from die-casters. Auto parts manufacturers and ceramics manufacturers are only booking Zamak on receiving bulk orders from end-users. Both the auto and construction sectors are stalled leading to reduced booking for zinc alloys. Some die-casters have idled their zinc diecasting operations and are only running their aluminium production. Zamak producers in the North are operating at 40-50pc capacity while in South India at less than 40pc. Some producers had to cut production from 60pc to 40-50pc as a result of low demand. The slowdown in the auto sector has hurt Zamak production. 

 

The Davis Index for Zamak #3 Monday fell by Rs1,540/mt to Rs188,460/mt del India consumer and the index for Zamak#5 settled at Rs191,470/mt del India consumer from the week prior. 

 

Price of Special High Grade (SHG) zinc Monday fell by Rs2,000/mt to approximately Rs183,000/mt from the prior Monday. 

 

The official three-month LME zinc settled at $2,067.5/mt on Friday, down by $9/mt from the prior Monday, pulling down the prices of Zamak and SHG. 

 

($1=Rs75.54)

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