Prices of zinc grades rose on Thursday from Monday in the domestic markets in the week ending November 12, trending flat to up. Prices rose on the back of higher offers amid a rise in LME zinc contract and bullish demand ahead of the Diwali break.
On Wednesday, the official LME three-month contract rose by $23.5/mt and closed at $2,647/mt, up 1pc since last Friday.
The Davis Index for zinc galvanizer’s dross in Mumbai on Thursday settled at Rs166,817/mt ($2,235/mt) ex-works producer, up by Rs750/mt from Monday. Offers were raised on the back of higher primary metal prices which are between Rs218,000-224,000/mt, up by almost Rs3,000/mt from Monday.
Demand for dross in Mumbai and Delhi was high on Thursday as several units will shut shop and are procuring material ahead of temporary Diwali break. In Delhi, the Davis Index for zinc galvanizer’s dross in Delhi Thursday settled at Rs172,271/mt ex-works producer, up by Rs1,826/mt from Monday. The market for zinc dross in Mumbai weakened as spreads for the index widened by 1.12pc from Monday and spread for Delhi index widened by 0.61pc despite a rise in indexes.
Secondary zinc ingot
The Davis Index for secondary zinc ingot in Mumbai settled at Rs169,567/mt ex-works consumer, up by Rs1,067/mt from Monday. Demand from brass manufacturers increased who are also stocking up to start production post-Diwali. Some brass manufacturers said they are not planning to shut shop and will be producing even during the holidays. In Mumbai and Delhi however, markets will be closed, so several manufacturers stocked up beforehand.
The Davis Index for secondary zinc ingot in Delhi Thursday settled at Rs174,200/mt ex-works consumer, up by Rs4,200/mt. Prices also rose on the back of high offers as market participants seasonally buy more quantity before the Diwali break.
The market for secondary zinc ingot weakened in Mumbai as spreads narrowed by 0.98pc from Monday despite the index rising by 0.63pc from Monday. Index for secondary zinc ingot Delhi rose 2.47pc while spreads widened by 0.64pc, indicating a strong market in Delhi for secondary zinc ingots.
New Zinc Diecast
The Davis Index for new zinc diecast rose by $1/mt on Thursday and settled at $1,895/mt cfr India port from Monday. Demand will revive after a week, according to traders. Offers from the Middle-East were on the lower side on Thursday, said traders.
The Davis Index for Zamak #3 Thursday settled at Rs225,333/mt, up by Rs583/mt from the Monday. Prices rose on the back of higher offers and raised prices of primary zinc. The Davis Index for Zamak#5 settled at Rs228,333/mt del India consumer, up by Rs583/mt.
The market for Zamak#3 and Zamak #5 weakened despite an increase in indexes. Spreads narrowed for Zamak#3 by 1.72pc and Zamak#5 by 1.76pc from Monday. Demand for zinc scrap and ingots was robust on Thursday which resulted in higher offers. Prices rose throughout the week. Demand from auto was healthy and infrastructure slowly gaining.
Several incentives were announced by the Finance Minister for the manufacturing sector. A large chunk of the incentives is for the automobile and auto components sector at approximately Rs570bn. This will help the sector revive at a faster pace and support prices of scrap going ahead once manufacturing speeds up.