Prices of lead scrap and ingot have fallen in the last one month, but the market for lead in both Mumbai and Delhi strengthened in terms of spread. The official three-month LME lead contract dipped by $231/mt to $1,778.5 on Oct 6 from the first week of September.
In Delhi, prices of secondary lead ingots were firm as the index dipped just 0.22pc to Rs144,500/mt (1,970/mt) ex-works producer down by Rs313/mt from the first week of September. Demand for re-melted lead was high in central and north India with battery makers ramping up production. Market prices in Delhi remained well above Mumbai prices. In Mumbai, the Davis Index on Oct 7 settled at Rs142,000/mt ex-works producer down 5pc from the first week of September. Prices were more volatile in Mumbai than in Delhi because there are still several smelters who are finding it difficult to continue business amid COVID-19 pandemic.
It is not easy to overcome the challenges brought in by the pandemic. High infection rates in Mumbai are resulting in disruption of production. Monsoons also played spoilt sport in September, resulting in lower trades due to logistics issues amid flooding in and around Mumbai region.
Demand from battery makers remained healthy throughout the month although not as strong as it was in the previous month. The official three-month LME lead contract dipped by $231/mt to $1,778.5 on Oct 6 from the first week of September. Markets in major Indian cities remained firm and strengthened despite a fall in LME lead levels on the back of demand from the auto sector as revealed in the spread analysis.
|Region||Lead Grade||Oct 7, 2020||Sep 2, 2020||Index change||Spread Change (%)|
|Index (Rs/mt)||Spread (%)||Index (Rs/mt)||Spread (%)|
|Delhi||Secondary Lead Ingot||1,44,500||110.8||144813||98.13||-0.22%||12.67|
|Lead batteries (drained)||79,833||61.21||82500||55.9||-3%||5.31|
|Mumbai||Secondary Lead Ingot||1,42,000||108.88||149500||101.3||-5%||7.58|
|Lead batteries (drained)||79,667||61.09||82625||58.02||-4%||3.07|
The Davis Index for lead batteries (drained) in Mumbai settled lower by 5pc to Rs79,667/mt del consumer while in Delhi it settled at Rs79,833/mt del consumer down 3pc on Oct 7 from the first week of September. In Delhi, smelters enjoyed a better margin as prices of raw materials dipped by 3pc while secondary lead ingot prices remained flat from the previous month. In Mumbai, prices of secondary ingots and lead battery scrap moved in tandem. The index for secondary lead ingots fell by 5pc in Mumbai while lead batteries (drained) index dipped by 4pc.
Markets strengthened in Mumbai and Delhi in terms of spread. Spreads for secondary lead ingots widened by 12pc in Delhi from the previous week and 7.58pc in Mumbai compared to the month prior. LME lead dipped by 11pc while the index for ingots in Mumbai and Delhi fell by 5pc and 0.22pc, respectively.
Spreads for lead batteries (drained) contracted by 5-3pc in Delhi and Mumbai, respectively, while index fell by 3-4pc in a month. Despite a fall in prices, markets strengthened supported by demand from smelters. In the same month, LME slipped by over 11pc.