Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Smelters in India are working at less than 40pc capacity from pre-pandemic levels while battery makers are gradually ramping up production to meet growing demand from end-users. This, has led to an apparent shortage of secondary lead ingots in the market. The Davis Index for secondary lead ingots Wednesday settled at Rs138,200/mt ($1,812.60/mt) ex-works Delhi producer, up by Rs3,000/mt from the week prior on improved demand amid a shortage of ingots.


Unavailability of labour at recyclers has hampered the processing of undrained battery scrap. Dismantling of old batteries is a labour-intensive work and smelters are not ready to buy non-processed batteries and processed batteries are in short supply. In the absence of labour, prices of scrap batteries, especially in Mumbai, has headed southwards. The Davis Index for lead batteries (drained) Delhi settled at Rs77,040 del Delhi consumer, up Rs90/mt from the prior week while the index fell by Rs625/mt to Rs76,325/mt del Mumbai consumer from the prior week.


Scrap prices have dipped for three consecutive weeks while there is an improvement in lead ingot prices. Few trades were heard in Mumbai while in Delhi trades improved substantially compared to the prior week as more orders were booked. Traders in Delhi are buying more ingots as they expect a rise in demand supported by UPS, inverter manufacturers. Seasonal demand from these manufacturers lasts until July end. With the start of monsoon, lead demand subsides in India triggering traders to offload stocks, pushing prices lower in the domestic market as few traders look to export lead ingots.


In South, the government has again imposed a lockdown fearing the second wave of COVID-19 infections, while Mumbai and Delhi have an equally higher number of virus cases but are yet to decide on re-imposition of a lockdown. This has impacted market sentiments and delayed reduced scrap purchases. Prior to the lockdown, in March, smelters had stocked scrap, while battery manufacturers stocked ingots. A similar market trend could resurface if the market anticipates further lockdowns.


The three-month official LME lead contract is up by $33.5/mt to $1,780.5/mt on Tuesday from the prior week. Prices of LME affect prices of domestic ingots and primary lead ingots. Primary lead ingot prices were up by Rs2,000/mt on June 15 at approximately Rs158,400/mt in India from June 8. LME lead is trending higher and prices are expected to move upwards with major global auto manufacturers resuming production.



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