The weekly increase in the official three-month LME zinc contract drove up offer prices in the domestic markets on Monday compared to the week prior. Zinc prices jumped by 4-5pc this week on the back of higher offers amid firm demand. Primary zinc prices also rose which led to higher zinc dross and zinc alloy prices. Markets strengthened in both Mumbai and Delhi in terms of spreads. The official three-month LME zinc contract settled at $2,883.5/mt, up by $76.5/mt or almost 3pc higher from the prior week.
The weekly Davis Index for zinc dross in Mumbai on Monday settled at Rs198,333/mt ($2,739/mt) ex-works producer, up by Rs10,555/mt. Prices gradually climbed through the week in line with LME gains. Primary zinc, the basic raw material for most galvanizers, rose to approximately Rs235,000-240,000/mt del India, almost up by Rs10,000/mt from the prior week. Mumbai markets strengthened with spreads for the price index contracting by 2.86pc from the prior week.
The weekly index for Delhi zinc dross jumped by Rs8,904/mt to Rs200,071/mt ex-works producer. Delhi traders said demand has not changed, but offers are higher, several buyers in the region resisted offers. Some galvanizers are displeased with the acute rise in primary zinc prices which has prompted them to raise zinc dross prices. In Delhi, the market strengthened in terms of spreads which narrowed by 2.03pc from the prior week.
In Mumbai, the weekly Davis Index for secondary zinc ingot, Monday, settled at Rs201,200/mt ex-works consumer, up Rs9,875/mt driven by higher offers. Demand from brass manufacturers remained firm but buyers turned cautious amid high offers. Markets in Mumbai strengthened in terms of spreads which widened by 2.4pc from the prior week.
The Davis Index for secondary zinc ingot in Delhi settled at Rs206,556/mt ex-works consumer, up by Rs10,056/mt from the preceding week. Spreads widened by 2.52pc for the Delhi index, indicating a strong market.
Price of imported new zinc diecast rose with offers heard at around $2,500-2,600/mt cfr India port. The Davis Index for new zinc diecast rose by $189/mt to $2,520/mt cfr India port. Trade volumes lowered on Monday given the hike in offers.
Zinc alloy prices also rose on high primary zinc prices. Zamak #3 and Zamak #5 rose by over 4pc from the prior week. The weekly Davis Index for Zamak #3 settled at Rs243,900/mt del India consumer, up Rs9,620/mt. Prices were solely driven by an increase in raw material prices rather than a change in demand. The Davis Index for Zamak #5 settled at Rs246,900/mt del India consumer, up by Rs9,620/mt compared to the previous week.
Markets for Zamak #3 and Zamak #5 strengthened in terms of spreads which widened by almost 2pc from the prior week. Demand from the auto sector may slow amid production cuts while demand from the construction sector is firming, said die casters.