In the week ending Monday, zinc scrap prices in Mumbai rose amid improved demand for the raw material and ingots as the government has started to ease the lockdown in a phased manner. Dross prices increased by almost Rs4,000/mt, while secondary ingot prices inched up only slightly. Prices in Delhi, however, slipped in line with a drop in LME levels. 

 

The official three-month LME zinc contract fell by $141/mt or 5pc to $2,886.5/mt on Friday from a week ago. On Friday, the contract slipped sharply by $90/mt or 3pc from Thursday. The fall in LME weighed down domestic scrap in Delhi and imported new zinc diecast. But in Mumbai, prices moved more in tandem with the demand-supply dynamic rather than LME. 

 

Zinc galvanizer’s dross

The weekly Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs198,164/mt ($2,683/mt) ex-works producer, up by Rs3,964/mt on Monday driven by higher offers amid improved demand in the consuming sectors. The weekly Davis Index for zinc galvanizer’s dross for Delhi settled at Rs194,990/mt ex-works consumer, down by Rs4,293/mt on Monday, in line with a drop in LME levels. 

Zinc galvanizer’s dross prices in Mumbai are usually lower than in Delhi. But since the announcement of the lockdown, the price trend changed. The Maharashtra government easing its lockdown restrictions bolstered demand in Mumbai where more manufacturers are present as compared to Delhi. With the resumption of manufacturing units, demand in Mumbai shot up. Markets improved in terms of spreads compared to the prior week as activity in the market has picked up. 

 

Secondary zinc ingot 

The Davis Index for secondary zinc ingot in Delhi settled at Rs198,833/mt ex-works consumer, down by Rs5,540/mt from a week ago driven by a fall in bids amid weakening in LME levels. Manufacturers lowered offers in a bid to liquidate inventories and boost demand. The weekly Davis Index for secondary zinc ingot in Mumbai settled at Rs201,257/mt ex-works consumer, up by Rs182/mt amid inquires from brass manufacturing units have started rising. Markets for the grade strengthened in terms of spreads with trades improving in both the cities and positive sentiment on resumption of manufacturing. 

 

New zinc diecast 

The Davis Index for imported new zinc diecast settled at $2,299/mt cfr India port, down by $121/mt on a fall in LME levels. Amid continued softening bids by Indian importers and a drop in LME levels, deals were at $2,300/mt cfr India port. Some offers were heard between $2,250-2,300/mt cfr India port. Bids were heard at around $2,125-2,225/mt cfr India port on Monday. 

 

Zinc Alloy

The weekly Davis Index for Zamak #3 on Monday settled at Rs250,390/mt del India consumer, down by Rs3,510/mt, as the fall in LME pushed primary zinc prices down. In Mumbai primary zinc was around Rs236,000-238,000/mt del consumer, while in Delhi, prices were around Rs234,000-235,000/mt del consumer. Primary zinc is the basic raw material for Zamak. Demand is on the recovery path but could take time to return to normalcy. Die casters said orders have slightly increased compared to previous weeks. With the auto sector promising a good pace of recovery, automakers are set to ramp up production. 

Markets for zinc alloys improved despite a fall in prices over the week in terms of spreads on increased orders. Prices had the window to fall further in line with LME, but the gradual demand improvement supported prices on Monday. Manufacturers aim to sell off inventories quickly and make up for the losses incurred during the low business days. 

 

($1=Rs74.1)

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