Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Zinc prices fell across grades driven by the fall in LME zinc on Monday from the previous week. The official LME three-month zinc contract fell by $86/mt and settled at $2,586/mt on Friday, Jan 29, from the previous week. Markets for scrap and secondary ingots strengthened in terms of spreads while spreads for zinc alloys weakened from a week prior. 


In Delhi, the weekly Davis Index for zinc galvanizer’s dross on Monday settled at Rs182,333/mt ($2,501/mt) ex-works producer, down by Rs5,667/mt on low offers as LME zinc dipped. Galvanizing units have reduced offers as prices of primary zinc was also lower than previous week’s. A fall in LME resulted in prices of primary zinc, which is the raw material for galvanisers, to be revised downwards. Primary zinc was around Rs209,000-216,000/mt del India, down by almost Rs3,000-4,000/mt from a week ago. In Mumbai, the weekly Davis Index for zinc galvanizer’s dross slipped by Rs5,667/mt to settle at Rs182,333/mt ex-works producer.


Galvanizing markets have gained momentum with healthy demand from infra and construction sectors. Markets for zinc dross in Delhi and Mumbai strengthened as spreads contracted despite the drop in indexes. The spread for zinc dross’ Delhi index contracted by 0.83pc while the spread for Mumbai’s index contracted by 0.31pc. 


The weekly Davis Index for new zinc diecast on Monday settled at $2,244/mt cfr India port, down by $56/mt. Demand was firm from Indian buyers. New zinc diecast index fell by almost 2.43pc from the prior week. The market for new zinc diecast strengthened with spreads for the index narrowing by over 0.7pc.


The weekly Davis Index for secondary zinc ingot in Delhi settled at Rs187,750/mt ex-works consumer. Prices are down for the third consecutive week influenced by lower LME levels. Markets for secondary zinc ingot in Delhi strengthened as spreads widened by 0.87pc. Offers were pushed down on the back of lower LME and zinc prices domestically amid firm trades from brass manufacturers in India. In Mumbai, the weekly Davis Index for secondary zinc ingot fell by Rs4,800/mt to Rs184,200/mt ex-works consumer. The markets for the grade in Mumbai strengthened with the spreads for the index widening by 0.79pc. 


Brass manufacturers are looking to stock secondary zinc ingots for the coming weeks as the dip in prices is quite extensive and may bode well for the brass manufacturers. This may create a high demand situation for the secondary zinc ingots, thereby supporting prices. Brass ingots and semi finished products’ demand is fairly strong, noted brass manufacturers in Delhi. 


The weekly Index for Zamak #3 settled at Rs221,775/mt del India consumer, down by Rs8,725/mt. Prices tumbled for zinc alloys in line with raw material prices, i.e primary zinc and downwards trending LME. The weekly index for Zamak #5 fell by Rs8,725/mt Monday to Rs224,775/mt del India consumer. Markets for Zamak #3 and Zamak #5 weakened as spreads for the indexes contracted marginally from the week prior by less than 1pc. 


Demand for zinc was firm and is expected to rise in the week due to the sudden drop in prices and galvanizing activities picking up. The Budget announced several packages for construction and infrastructure growth which will drive demand for galvanizing. Several industries that rely on zinc and had held back procurement may now find it viable to fill inventories for the coming weeks, however, some market participants believe prices may fall further ahead of the Chinese Lunar New Year on Feb 12.


($1 = Rs72.88)


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