The weekly indexes for zinc scrap and ingot on Monday rose led by a hike in weekly LME zinc levels. The official three-month LME zinc contract gained almost 1pc, or $29/mt, to $3,027/mt on Friday from a week prior. Primary zinc prices were revised upwards which led to higher offers for zinc dross and zinc alloys, irrespective of the low demand in the country.
The weekly Davis Index for zinc galvanizer’s dross in Delhi on Monday settled at Rs199,283/mt ($2,725/mt) ex-works producer, up by Rs4,723/mt driven by high offers. Traders expect market to improve in the city as lockdown is being eased, but demand was still on the lower end. For Mumbai, the weekly Davis Index for the same grade settled at Rs194,200/mt ex-works producer, up by Rs1,550/mt. Offers in the city were pushed up in line with a slight upswing in LME levels. With the lockdown being eased in Mumbai, trades are expected to pick-up which should support prices. An increase in infrastructure and construction activities would boost demand for zinc.
The weekly Davis Index for secondary zinc ingot for Delhi settled at Rs204,283/mt ex-works consumer, up by Rs2,000/mt driven by slight improvement demand from brass manufacturers. Small-scale manufacturers are clearing off their inventories, trying to fight financial crunch after almost two months of slowdown in business. Similarly, the Davis Index for the same grade in Mumbai settled at Rs201,075/mt ex-works consumer, up by Rs62/mt. Offers were met with very low bids in the city which pressured the prices.
Markets for the grade in Delhi and Mumbai weakened in terms of spreads over the week driven by lower trades in the city and departure of several market participants amid rise in COVID-19 cases.
Imported new zinc diecast prices rose in the week driven by higher offers driven by higher LME. Offers were heard between $2.450-2,500/mt cfr India port. The weekly Davis Index for new zinc diecast on Monday settled at $2,420/mt cfr India port, up by $76/mt. Trades are slow as demand is yet to improve. Lockdown has affected trades to a large extent and it would take considerate amount of time to return to normalcy.
With a rise in primary zinc prices, zinc alloy prices also rose which were in line with LME’s rise. Primary zinc prices rose in the week said Zamak #3 and Zamak #5 manufacturers. Diecasters are still waiting for large orders, obstructed by lockdown and shutdown of automotive companies. Infrastructure and construction activities are yet to pick up.
The weekly Davis Index for Zamak #3 on Monday settled at Rs253,900/mt del India consumer, up by Rs933/mt and the index for Zamak #5 settled at Rs256,290/mt del India consumer, up by Rs323/mt.
Sentiments are still weak in the country. Prices are rising but demand continues to be weak. Lackluster trades for zinc grades took place on Monday. Financial burden of small scale industries is rising which might dent improvement.