The weekly Davis Index for lead batteries (drained) Wednesday rose by Rs3,443/mt ($45.48/mt) to Rs80,483/mt del Delhi consumer on the back of healthy demand from smelters. In Delhi, smelters witnessed an uptick in orders from battery makers in the past week.
Barring this week, battery scrap prices have dipped consecutively since the beginning of June while prices of secondary lead ingots have steadily increased as battery manufacturers ramped up operations. The weekly Davis Index for lead batteries (drained) for Mumbai stood at Rs78,950/mt del consumer, up by Rs2,625/mt from the prior Wednesday.
Ingot makers have returned to market to buy scrap for July, but their buying volumes are still 50pc lower than pre-COVID-19 levels. In the previous week, there was a shortage of ingots which pushed prices up, however, for July shipments the prices for ingots have levelled off in Delhi. The Davis Index for secondary lead ingots in Delhi were marginally up by Rs83/mt at Rs138,283/mt ex-works producer on Wednesday from the week prior, while the index settled at Rs136,575/mt ex-works Mumbai producer, up by Rs1,125/mt from the prior week. Mumbai’s lead market is gaining momentum as manufacturing activities have gathered pace in the region.
With the end of summer and onset of monsoon, some ingot manufacturers in Delhi rued of low demand. Cyclically, peak demand for batteries, inverters and UPS in India ends in July. A major end-user of lead batteries is telecom sector, which is also struggling. Lead producers are hopeful of a revival in the industry which could support demand in the short term.
In the absence of demand from battery manufacturers who are located in containment zones, lead producers in Delhi are seeking new buyers and reaching out to companies in central and southern regions. Micro and smaller smelters are struggling to keep their business afloat while larger companies and traders are exploring export markets amid weak domestic demand. With the weakness in Indian rupee, export volumes could increase, said traders.
The official three-month LME lead contract has been falling for three consecutive sessions. On Tuesday, the contract settled at $1,761.5/mt, down by $20/mt from the prior week. Primary lead producers hiked their prices by Rs3,200/mt to Rs164,100/mt on June 22 from June 18.
($1=Rs75.69)