India’s domestic lead scrap market continues to face logistical disruption in completing pending orders. Several countries in the world, including India remain under partial or complete lockdown. Lead ingot smelters and battery scrap dealers have suspended operations in compliance with the government-imposed restrictions.
The Davis Index for secondary lead ingot settled at Rs139,500/mt ex-works Mumbai producer, flat from the Wednesday prior and at Rs140,967/mt ex-works Delhi producer, also flat.
Smelters are unable to fix delivery schedules for previous bookings amid high freight cost and non-availability of transportation. Market participants await a clarity on official market re-opening date before booking orders. Smelters in Delhi are short of inventories and could return to the scrap markets immediately after they reopen. A lack of material with smelters could lead to a price rise when demand revives after markets reopen. Additionally, with a rise in LME lead, lead scrap prices in the global markets saw an uptick.
The Davis Index for lead batteries (drained) settled flat at Rs83,725/mt ex-works Mumbai consumer and at Rs84,133/mt ex-works Delhi consumer on Wednesday as trades have come to a halt.
The auto sector, which was sluggish even before the outbreak of COVID-19, has been hit further due to production halts announced by major automakers. This could have a ripple effect on lead scrap markets. When markets reopen, auto recovery could be slow believe market participants.
Market participants are unable to guess the direction in which the lead market is headed. Recovery in demand also rides on how the government deals with economic repercussions of the COVID-19 lockdown.
The three-month official LME lead contract rose by $81/mt and settled at $1,718/mt on Tuesday from the previous week.
($1 = Rs75.89)