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

In India, prices  or zinc scrap and both, primary and secondary zinc ingots rose, as LME gained around $126.5/mt in a week to settle at $2,156/mt on July 10.


The weekly Davis Index for galvanizer’s dross in Mumbai rose by Rs3,834/mt ($50.75/mt) and settled at Rs150,117/mt ex-works producer on Monday. Demand remains subdued but sellers raised offers as LME gained substantially. Galvanizers said they are relying on traders to sell their output as oxide manufacturers are not placing major orders with galvanizers.


Stalled infrastructure projects, including housing projects, have hurt demand for steel galvanization. Galvanizers are expecting smooth flow of business for dross by end of July. Dross inventory is expected to reach 1mt each towards the end of July for some of the galvanizing units. The market for dross in Mumbai and Delhi weakened. Spreads for dross in Mumbai and Delhi widened over the week by 4pc and 5pc, respectively.


The Davis Index for galvanizer’s dross in Delhi settled at Rs150,617/mt ex works producer, up by Rs3,417/mt, from the prior week. Demand from oxide manufacturers influence prices for dross. These producers have cut down production lately as there is less demand from tyre, paint and ceramics sector, in turn hurting dross consumption. On an average, oxide production is down by 40pc compared to pre-COVID levels.


With lockdown changing the market dynamics, it will be difficult to reach pre-COVID levels in terms of production, supply and demand. Workforce issues are also a major factor as galvanizing and oxide making requires skilled labourers. 


The Davis Index for secondary zinc ingot rose by Rs3,250/mt in Mumbai on Monday and settled at Rs157,200/mt ex-works Mumbai consumer from the week prior. Demand has slightly improved but not in line with the street expectations.


Several brass manufacturers and galvanizers have resumed operations which is pushing demand upwards for secondary zinc ingots. Producers of secondary zinc ingots have also slashed output as there is clear indication of slumped demand from end users, said secondary zinc ingot producers in the north. Traders in Mumbai said it will take more than six months for revival of demand to reach Q4 (Jan-March) levels in India.


The Davis Index for secondary zinc ingots in Delhi settled at Rs156,200/mt ex-works consumer, up by Rs1,000/mt from the week prior. Prices rose in line with LME zinc and slight improvement in demand in Delhi. Market for secondary zinc ingots weakened in India as the spreads narrowed by 5pc in Delhi and 6pc in Mumbai. LME has jumped steeply in the week ending July 10 from the week prior which affected spreads. Manufacturers raised offers in the region as LME rose and in anticipation of improved demand.


The Davis Index for new zinc die-cast settled at $1,695/mt cfr India port, up by $33/mt. Spreads for the same has widened by 3pc projecting a weakening market for the scrap grade which has resulted in several importers backing out from imports given the current market scenario.


Zinc Alloy


The Davis Index for Zamak #3 rose by Rs6,045/mt to Rs190,975/mt del India consumer, Monday from the week prior and the Davis Index for Zamak #5 also rose by Rs6,345/mt to Rs193,975/mt del India consumer.


Spreads for both Zamak grades fell by 5pc, depicting a weaker market in India and also the rupee weakened and stood at 75.54 per dollar on Monday from 74.7 against a dollar the previous week, resulting in weaker markets in India.


Die-casters in India are sustaining production cuts on low demand from auto sector and from manufacturers of zips, bathroom fittings, etc. Producers of Zamak have also cut down production as there are few buyers. Prices of Zamak rose in line with LME zinc and primary zinc.


The official three-month LME zinc contract gained $126.5/mt and settled at $2,156/mt in a week on July 10 from the previous week. Primary producers raised their offers by Rs8,700/mt to Rs189,100/mt on July 13 from a week ago prices. Producers raised prices of Zamak as raw material prices rose on the back of LME.


If LME zinc maintains the rally, prices of domestic scrap and ingots will also climb despite low trades taking place. But as LME is rising, there is positive market sentiments which will play its role in slowly boosting demand in the country, suggested market participants.



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