Prices of most zinc grades fell on Monday, extending the previous week’s dip in prices. Domestic zinc alloy prices and imported new zinc diecast, however, rose from the previous week. The official three-month LME zinc contract rose to $2,849/mt, up by $104/mt in a week. The grades that usually derive prices from LME rose.
Domestic buyers avoided new deals on Monday amid the sky-high prices of dross and secondary zinc ingot in both Delhi and Mumbai. The Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs190,167/mt ($2,587/mt) ex-works producer, down by Rs3,500/mt from the preceding week amid weak trades. Some zinc oxide manufacturers have decided to hold back procurement due to high prices while they bid for more competitive prices. The Davis Index for zinc galvanizer’s dross in Delhi, Monday, settled at Rs191,111/mt ex-works producer, down by Rs2,789/mt from the previous week. A dip in Monday’s prices could result in robust trades in the coming days as demand still remains firm, shared participants with Davis Index.
Markets for zinc dross in both Delhi and Mumbai weakened as spreads widened for the scrap grade compared to the week prior. The spread for zinc dross Delhi index widened by 5.49pc while the spread for Mumbai index expanded by 5.82pc from the previous week.
The Davis Index for secondary zinc ingot in Delhi fell by Rs333/mt to Rs194,667/mt ex-works consumer on Monday from the preceding week. Market for secondary zinc ingot in Delhi weakened as spreads for ingot contracted by 4.34pc from the previous week. Prices fell in Delhi compared to prior Monday on the back of lower demand from brass manufacturers in India who have been resisting the high prices for more than a couple of weeks. The Davis Index for secondary zinc ingot in Mumbai settled at Rs190,250/mt ex-works consumer, down by Rs1,950/mt, Monday, from a week ago. The markets for secondary zinc ingot in Mumbai weakened with the spreads for the index contracting by 5.05pc from the previous week.
Brass manufacturers are hopeful of an increase in brass products’ demand in the coming weeks and await prospective buying from clients against new orders. They reiterated that market needs to improve for secondary ingot in terms of demand and prices. The current high prices are unreasonable as they have been rising on the back of speculation and not demand, said manufacturers.
The Davis Index for new zinc diecast settled at $2,230/mt del India consumer up $97/mt from the prior week. Demand from Indian buyers continues to be firm but may dip in the next week, said trades, citing continued rise of scrap prices in the international markets.
The Davis Index for Zamak#3 settled at Rs234,333/mt del India consumer, marginally up by Rs248/mt on Monday from a week ago. Prices rose in line with the rise in LME. Prices are expected to rise further as LME is on an upward trend. The Davis Index for Zamak#5 rose by Rs248/mt Monday to Rs237,333/mt del India consumer from the previous week. Markets for Zamak #3 and Zamak #5 weakened as spreads for the indexes contracted by almost 4.9pc from the week prior.
Prices of primary zinc on Monday was quoted around Rs230,000-238,000/mt across India, up by almost Rs10,000/mt from the prior week. With a jump in primary zinc prices, galvanizers could push offers up in the coming weeks and so would Zamak producers. Prices of most grades are expected to be higher in the coming days, said market participants.
($1 = Rs73.49)