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

Indian zinc scrap market was subdued this week in the absence of major bookings for any scrap grades or ingots. This led to prices being flat in major cities. Market participants across the value chain are experiencing labour shortage and are finding it difficult to operate with social distancing norms. Smelters and manufacturers are gradually adopting to the “new normal” but the transition is impacting productivity and efficiency. 


Unless the lockdown is entirely lifted and the value chain is completely restored, zinc scrap markets will remain subdued in India, said traders. Demand for zinc scrap has not improved during the week. Few trades were heard and most offers were left unchanged.


The Davis Index for galvanizer’s dross in Delhi settled at Rs147,200/mt ex-works producer, up by Rs250/mt from the previous week. Amid uncertainties around end-user demand, zinc oxide manufacturers slashed production byMost oxide manufacturers are  operating at 40pc capacity. Traders remained cautious of committing to placing new orders. Manufacturers are avoiding sales on credit basis to maintain free cash flow. 


The Davis Index for galvanizer’s dross in Mumbai Monday settled at Rs146,283/mt ex-works producer, up by Rs166/mt from the prior week. Most producers are waiting for better orders for galvanization, absence of which has lowered by-product zinc dross’ inventories. Galvanizer in Mumbai plan to raise their offers for dross once they reach 1mt and have sufficient stock to retail. Most galvanizers have 400-500kg of dross and in the absence of demand from oxide manufacturers, galvanizers and relying on traders to sell this stock. 


Market for dross in India has strengthened as spreads have narrowed by 3pc on Monday compared to the previous week, despite prices falling in India. 


The weekly Davis Index for secondary zinc ingot rose by Rs1,000/mt to Rs153,950/mt ex-works Mumbai consumer as demand from brass manufacturers and local galvanizers increased. Infrastructure projects in the region are gaining momentum, which has led to higher demand for galvanized steel. With the start of monsoon season, demand for galvanized sheets has picked up which is in turn boosting the demand for secondary zinc ingots used by local galvanizers. 


The Davis Index for secondary zinc ingots in Delhi settled at Rs147,200/mt ex-works consumer, up by Rs250/mt, Monday from the prior week on slight improvement in demand from consuming sectors. Markets for secondary zinc ingot has also strengthened as spreads have widened by 2-3pc in a weeks’ time. 


Prices of new zinc diecast fell by $63/mt and settled at $1,662/mt cfr India port. Markets for new zinc diecast has weakened over the week as spreads have widened by 1pc from previous Monday. Importers shared that demand in the gone by week for new zinc diecast was slightly lower in comparison with the previous couple of weeks. 


Zinc Alloy

Zinc alloy consumers have cut production by 50pc and are operating with low number of staff leading them to buy fewer quantities of Zamak #3 and Zamak #5. Die casters that produce auto components have taken a huge hit in demand from the auto sector which is sluggish. Many die casters who use both aluminium alloys and zinc alloys for die casting are now producing only aluminium die casting products as demand for zinc alloys die castings is extremely low. This is affecting prices of zinc alloys.


 The Davis Index for Zamak#3 fell by Rs3,540/mt to Rs184,930/mt del India consumer, Monday from the week prior and the Davis Index for Zamak #5 also fell by Rs3,840/mt to Rs187,630/mt del India consumer. Trades have thinned and improvement of demand is going to be really slow and steady, says alloy producers in Faridabad. Though the prices have fallen, the spreads for zinc alloy has widened over the week by over 2pc, portraying markets to be stronger. 


Primary zinc prices were revised downwards by Rs2,700/mt to Rs180,400/mt. The official three-month LME zinc contract fell by $37/mt to $2,030/mt, Friday from the previous week pulling primary zinc prices down with it. Prices of Zamak also moved in line with LME.

The rupee has gained in terms of dollar and stood at Rs74.7 against $1 on Monday from Rs75.54/dollar in the previous week. This shows signs of economic recovery in India and led to major markets in India for scrap and ingots to strengthen. 


At the end of the June quarter, Australia’s top zinc producer, New Century Resources expects prices of zinc to rebound in the coming days across the world. This spread positive sentiments amid the COVID-19 pandemic. The company also produced 34,500mt of zinc in the June quarter, up by 22pc from the previous quarter and 68pc from the prior year. 



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