The weekly Davis Index for secondary lead ingot in Mumbai on Wednesday settled at Rs142,000/mt ($1,923/mt) ex-works producer, flat from the week prior despite a fall in LME lead but supported by local demand. Domestic demand is quite steady in Mumbai with battery makers’ demand supporting ingot market. The official three-month LME lead contact fell by $54.5/mt to settle at $1,845/mt on Tuesday from the prior week.
Domestic lead market may face harsh winds going ahead as the economy struggles to get back to pre-COVID levels with problems on the liquidity front, low auto demand and rising COIVD-19 cases affecting production for several lead smelters in both Delhi and Mumbai. Scrap collection is also affected.
Several market participants are looking forwards to auto sales in September. If sales improve then auto makers and component makers will ramp-up production or simply wait for inventories to come down amid these uncertain times. Pent-up demand may still play its part and some fresh demand owing to festive season could result in healthy auto sales for lead ingots and battery scrap.
The Davis Index for secondary lead ingot in Delhi stood at Rs144,000/mt ex-works producer, flat from the previous week. Smelters may have to reduce offers in the coming weeks if LME continues its downtrend and demand subsides. Much will depend on September auto sales.
The weekly Davis Index for lead batteries (drained) in Delhi on Wednesday settled at Rs79,833/mt del consumer, down by Rs500/mt on Wednesday. In Mumbai, the weekly Davis Index settled at Rs79,500/mt del consumer, down by Rs940/mt. Prices dipped slightly in major cities like Delhi and Mumbai as trades thinned with smelters reducing consumption slightly this week.
Markets in India strengthened for lead scrap and ingots in terms of spread analysis. Spreads for battery scrap narrowed slightly in Mumbai, under 1pc and in Delhi by 1.11pc from the previous week while LME dipped more than 2pc in the same period. Spreads for secondary ingots widened, projecting a strengthened market with spreads widening by almost 2.6pc in both Delhi and Mumbai. Domestic prices were flat from the prior week but LME dropped by 2.8pc.