Zinc grades’ indexes ticked upwards in line with the weekly climb of LME contract. Mumbai and Delhi are under lockdown till May-end. Very few trades were heard while offers rose in line with LME and countered by a few bids.
Primary zinc prices were revised upwards by approximately Rs3,000/mt from the prior week. In turn, dross and zinc alloy offers were pushed up. Several small-scale galvanizing units are shut but so are the end-user segment under the lockdown, pending deliveries are being addressed.
The official three-month LME zinc contract on Friday settled at $2,997/mt, up by $56.5/mt or 1.92pc from the prior week. Domestic currency was stronger on Monday at Rs72.8 against the US Dollar, compared to last Monday.
The weekly Davis Index for zinc galvanizer’s dross on Monday in Delhi settled at Rs198,117/mt ($2,721/mt) ex-works producer, up by Rs1,792/mt on hiked offers. Trading, however, was extremely slow and prices shared were only indicative and reflected LME’s climb over the week. However, market for the grade weakened in terms of spreads which widened with subdued demand in the city.
In Mumbai, the weekly Davis Index for zinc galvanizer’s dross on Monday settled at Rs193,200/mt ex-works producer, up by Rs2,000/mt. Most Mumbai galvanizing units are shut and production has come to a halt which is leading to diminishing dross inventories. After the lockdown is lifted, dross prices may go up on the back of a potential short-term scarcity of dross in Mumbai. In terms of spreads, the market weakened compared to the prior week due to absence of demand.
Brass manufacturing units in Mumbai and Delhi are mostly shut which has led to a low demand for secondary zinc ingots. Demand from North Indian states has also receded after announcement of lockdown in Uttar Pradesh — though some industrial activities are exempted. The rising COVID-19 cases are, however, hampering the smooth workflow, shared brass manufacturers.
In Delhi, the weekly Davis Index for secondary zinc ingot settled at Rs202,283/mt ex-works consumer, up by a marginal Rs83/mt in a demand-hurt market and the index for the same grade for Mumbai settled at Rs199,638/mt ex-works consumer, up by Rs438/mt in line with a climb in LME though prices were pressured due to absence of trades.
The market for secondary zinc ingot weakened with narrowed spreads compared to the prior week, mostly on the back of low demand. There is room for prices to expand but tepid demand is making it tough for offers to rise in proportion to LME’s climb.
The weekly index for imported new zinc diecast on Monday settled at $2,353/mt cfr India port, up by $45/mt due to sharp jump in LME. Demand from domestic buyers is low as they continue to work with available inventories, wanting to wait and take stock of the current situation before securing new bookings.
Zinc alloy markets strengthened on Monday as spreads widened for Zamak #3 and Zamak #5 driven by a climb in primary zinc prices.
The weekly indexes for Zamak #3 and Zamak #5 rose by Rs3,687/mt each to Rs251,325/mt and Rs254,325/mt del India consumer, respectively. With most automotive plants under maintenance and infrastructure sector struggling to recover from the second wave, demand for zinc alloys is weak and prices are rising solely on the back of global cues. Demand and market sentiments in India are low.
($1=Rs72.8)