Lead scrap markets in Delhi and Mumbai stayed shut as the government is yet to grant any lockdown relaxation. The Davis Index for secondary lead ingot settled at Rs139,500/mt ($1,843/mt) ex-works Mumbai producer and Rs140,967/mt ex-works Delhi producer, flat from prior Wednesday.
Like scrap markets, smelters in major cities like Mumbai and Delhi also remain shuttered and wait for May 3 when the lockdown is likely to end. Scrap collection, which does not fall into essential services, has taken a hit, mainly with limited trucks out on roads busy ferrying other essential goods. Post resumption, smelters are also staring at the possibility of a shortage of raw materials and disruption in the supply chain.
Market sentiment in Mumbai and its outskirts remains negative with Mumbai and Pune marked as COVID-19 hotspot areas. Should other smelters barring Mumbai reopen, their customers are likely to explore other markets.
Some battery manufacturers have resumed partial operations in green zones last week where the spread of the disease is limited .
Earlier, some market participants expected demand for lead scrap to surge once markets reopen. As 90pc batteries are manufactured with secondary lead, few traders still believe demand for secondary lead ingots from battery makers to rise, supporting lead scrap trades and pushing prices upwards. Amid uncertainty in markets, from both demand and supply side, all eyes are set on the end of the lockdown for a clear price direction.
The weekly Davis Index for lead batteries (drained) settled flat at Rs83,725/mt ex-works Mumbai consumer and Rs84,133/mt ex-works Delhi consumer. Smelters and scarp yards, once they reopen, could also face a shortage of labour with most people travelling to their hometowns. Regional movement of personnel is restricted with the government sealing off areas where the cases of COVID-19 continue to surge.
The three-month official LME lead contract settled at $1,648/mt on Tuesday from $1,657/mt on the prior Tuesday, down by $9/mt. Primary lead prices are usually in line with the LME prices. Since the lockdown, LME rose by $11/mt. Primary lead prices are, therefore, unlikely to fall when markets resume.
($1=75.67)