The weekly Davis Index for lead batteries (drained) Wednesday rose by Rs3,264/mt ($43/mt) to Rs82,214/mt del Mumbai consumer from the week prior. In Mumbai, demand for battery scrap has increased as secondary ingot producers are ramping up production to meet strong demand from end-users.
The Davis Index for secondary lead ingots Wednesday increased by Rs5,092/mt to Rs141,667/mt ex-works Mumbai producer from the prior week as demand for ingots increased amid strong demand from battery makers. Prices of both battery scrap and secondary lead ingots increased as industrial activities picked up over the week with several battery manufacturing facilities trying to reach pre-COVID production levels. Smelters in Mumbai are operating at 30pc capacity while many battery makers have reached 60pc capacity leading to a mismatch between supply and demand. Battery makers are staring at a low supply of raw materials which has encouraged smelters to raise their offers for secondary lead ingots. Mumbai market strengthened for scrap on Wednesday as spreads have tightened by approximately 2pc.
Drained scrap battery consumption has also increased as smelters tried to meet demand from end-use consumers. In India and across the world, people are working from home, this has resulted in higher consumption of power usage at homes and many have opted to buy home inverters or UPS systems to back up unreliable power supply. Many office spaces are upgrading power back up devices as they shift to cloud computing.
The weekly Davis Index for lead batteries (drained) in Delhi rose slightly by Rs134/mt to Rs80,617/mt del consumer Wednesday from the week prior and the index for secondary lead ingot rose by Rs500/mt to Rs138,783/mt ex-works producer from the previous week. In Delhi, prices were more subdued than Mumbai as the market in the North is weaker and trades were limited. Delhi market is weakening in terms of spreads for both scrap and ingots even though prices have increased slightly.
The official three-month LME lead contract settled at $1,801.5/mt, up by $40/mt, Tuesday from the week prior. The primary lead prices were revised downwards by Rs1,800/mt on June 29 from the previous week. LME lead rose for the fourth consecutive session which might push primary prices up in India.