Zinc scrap and ingot prices rose sharply on Monday on the back of climbing LME levels. The official LME 3-month contract rose by 5.7pc in a week to $2,807/mt, which resulted in offers rising in Mumbai and Delhi for all grades. Markets, however, weakened in terms of spreads.
The weekly Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs187,778/mt ($2,586/mt) ex-works producer, up by Rs4,178/mt from the preceding week, driven by higher offers which were met with firm demand. In Delhi, the weekly Davis Index for zinc galvanizer’s dross settled at Rs191,167/mt ex-works producer, up by Rs6,310/mt. Demand for dross is well supported by zinc oxide manufacturers because of strong demand from tyre manufacturers. Primary zinc prices rose by over Rs10,000/mt in a week.
Markets for zinc dross in Delhi and Mumbai weakened as spreads narrowed for dross indexes. The spreads for Delhi dross price index widened by 3.41pc while in Mumbai, it widened by 2.28pc from the previous week.
The weekly index for secondary zinc ingot in Delhi jumped by Rs 7,300/mt to Rs196,500/mt ex-works consumer. Market strengthened as spreads narrowed by 3.86pc from the previous week for the index. The sharp rise in indexes is driven by higher price of raw material prices, including new zinc and old zinc diecast.
Demand from brass manufacturers is stable but may dip in the coming weeks with brass demand experiencing a slight dip. In Mumbai, the weekly index for secondary zinc ingot settled at Rs191,325/mt ex-works consumer, up by Rs5,525/mt on Monday. The markets for the grade also weakened with the spreads for the price index narrowing by 2.97pc from the previous week.
The weekly index for new zinc diecast settled at $2,331/mt, up by $34/mt. Demand from Indian buyers continues to be strong but some traders held back buying as LME has pushed offers too high.
The weekly index for Zamak #3 settled at Rs234,280/mt del India consumer, up by Rs8,605/mt, in line with LME zinc and prices of primary zinc. The weekly Davis Index for Zamak #5 rose by Rs8,650/mt Monday to Rs237,280/mt del India consumer. Markets for Zamak #3 and Zamak #5 weakened as spreads for the price indexes narrowed by over 3pc from the week prior.
Prices of primary zinc on Monday were quoted around Rs228,000-232,000/mt across India, up by almost Rs10,000/mt from prior Monday levels. Galvanizer’s and Zamak manufacturers use primary zinc as raw materials and a rise in prices push dross and Zamak prices higher.
($1 = Rs72.6)