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

All zinc scrap grades on Friday inched up by around 1pc from Monday. Prices moved in line with LME and demand is on an upward trajectory. Market participants remained bullish on domestic demand.


The official three-month LME zinc contract gained $15/mt on Thursday and settled at $3,025/mt. The jump led to an increase in primary zinc and scrap prices. 


Dross prices increased due to higher primary zinc levels on Friday and dross demand remained firm from both oxide manufacturers and brass industries. The Davis Index for zinc galvanizer’s dross on Friday settled at Rs197,500/mt ($2,659.22/mt) ex-works Delhi producer, up by Rs1,000/mt from Monday as raw material prices remained high and dross demand was healthy. 


Galvanizers pushed offers from 177,000/mt in the morning to 198,000/mt by the afternoon driven by solid deals in Delhi. The Davis Index for Mumbai’s zinc galvanizer’s dross settled at Rs210,000/mt ex-works producer, up by Rs683/mt from Monday, driven by accelerated demand. 


Markets weakened as spreads widened from Monday as demand is yet to reach expected levels. Demand for zinc could increase as the infrastructure sector gains momentum. Several ferrous market participants shared, finished steel demand could grow in the coming weeks which could boost orders from galvanizers. 


The Davis Index for secondary zinc ingot for Delhi on Friday settled at Rs203,700/mt ex-works consumer, up by Rs1,050/mt from Monday driven by an increase in offers. Similarly, the Davis Index for secondary zinc ingot for Mumbai settled at Rs206,450/mt ex-works consumer, up by Rs800/mt driven by higher imported material prices. Markets in Mumbai continued to prefer primary zinc grade over secondary despite a considerable difference in prices. 


Markets for secondary zinc ingot weakened in terms of spreads for both Mumbai and Delhi as trades were tepid amid the absence of consistent deals but prices were on a slight increase in line with the gains in LME. 


The Davis Index for new zinc diecast on Friday settled at $2,377/mt cfr India port, up by $20/mt from Monday owing to a jump in freight prices. Demand for the grade remained firm as the zinc market added production capacities that were withdrawn during the lockdown. Demand for secondary zinc alloys remained sluggish but a positive outlook for the auto sector could drive prices in the coming weeks.


Zinc Alloys

The Davis Index for Zamak #3 on Friday settled at Rs257,500/mt del India consumer, up by Rs590/mt in line with the slight increase in primary zinc prices. The index for Zamak #5 on Friday settled at Rs260,090/mt del India consumer, up by Rs661/mt from Monday’s levels.


Demand for zinc alloys has mproved from May end and June but has lost steam in August with a slump in domestic demand and dull export markets. With construction and infrastructure sector activities gaining momentum, zinc alloy trades could witness an improvement. 


Demand from the auto sector is on recovery but the shortage of semiconductors continues to hamper the Indian auto sector. Markets on Friday weakened in terms of spreads for the alloys  which narrowed as demand remained limited.



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