Domestic zinc scrap prices on Monday rose over the week despite weak sales. Offers for zinc grades in Mumbai and Delhi increased as LME levels climbed, which also influenced primary zinc prices to rise.
The official three-month LME zinc contract on Friday settled at $2,984,5/mt, up $66.5/mt in a week. The contract rose 2.28pc in a week driven by easing of US monetary policies which is expected to boost bullish sentiment, according to market experts.
The weekly Davis Index for zinc galvanizer’s dross in Delhi settled at Rs198,450/mt ($2,704/mt) ex-works producer, up by Rs3,083/mt on the back of jump in offers. Spreads for the grade narrowed by 0.27pc which indicted strengthening of the market. The index for the grade rose by 1.58pc.
The weekly Davis Index for zinc galvanizer’s dross on Monday for Mumbai rose by Rs5,375/mt to Rs193,450/mt ex-works producer. Higher offers indicated a strengthened market as spreads contracted by 1.36pc, though physical sales were thin.
Galvanizers are receiving less orders for steel galvanizing and expect this to last till lockdown is lifted and demand for finishes steel return. Low demand is currently leading to shortage of dross, which is supporting prices.
Secondary Zinc Ingot
In the past week, marginal trades were heard, said brass manufacturers who have cut production with most units now shut under the lockdown in both Delhi and Mumbai. Supply side hindrances are affecting the smooth flow of materials. Price indications heard on Monday were only offers with no to few trades heard in Delhi or Mumbai.
The weekly Davis Index for secondary zinc ingot in Delhi settled at Rs205,200/mt ex-works consumer, up Rs5,662/mt driven by LME.
In Mumbai, the weekly Davis Index secondary zinc ingot settled at Rs201,200/mt ex-works consumer, up by Rs6,500/mt driven by a rise in LME while demand was low due to the lockdown. Markets in Mumbai and Delhi strengthened as spreads widened over the week.
Most diecast units are shut in major cities amid lockdown, which has reduced demand for zinc alloys. The weekly Davis Index for Zamak #3 on Monday settled at Rs250,950/mt del India consumer, up by Rs1,450/mt due to high primary zinc prices.
The weekly Index for Zamak #5 settled at Rs253,950/mt del India consumer, up by Rs1,450/mt. Demand from consuming sectors is low, with auto manufacturers halting production temporarily due to the COVID-19 situation.
Spreads for Zamak #3 and Zamak #5 narrowed by 0.80pc from the prior week, demonstrating a weakened market for the grades as demand is low and prices failed to rise in line with the LME levels. Very few offers and bids were heard on Monday for zinc alloys.
The weekly Index for new zinc diecast settled at $2,355/mt cfr India port, rising by $8/mt. Demand is low due to market uncertainties. Industries have halted work due to the lockdown. However, offers for imported new zinc diecast are rising as demand is increasing globally, said market participants.