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

In the week ending Sept 7, major zinc scrap grades inched up 1-2pc except dross in Delhi which slipped 1pc from the previous Monday. The official three-month LME zinc contract settled at $2,498/mt on Friday, up by $16/mt or 1pc from the prior week. 


The Davis Index for zinc galvanizer’s dross in Mumbai Monday settled at Rs166,615/mt ($2,207/mt) ex-works producer, up by Rs4,115/mt from the previous week. Demand from oxide manufacturers continued to boost sales across Mumbai for dross. 

However, in Delhi, the index for zinc galvanizer’s dross settled lower by Rs1,708/mt at Rs164,625/mt from the prior week as several galvanizers dropped their offers to around Rs155,000-157,000/mt amid oversupply. Galvanizers feel this is a temporary slump and prices could go up next week as demand continues to be healthy. 


The market for zinc dross in Mumbai strengthened as spreads contracted by a little over 1pc from the previous week as domestic prices rose by 2.53pc while LME in the same period rose 1pc. In Delhi, however, the market weakened as spreads widened by 1.42pc with domestic prices inching down by 1.03pc on Monday from the week prior. 


Domestic prices of secondary zinc ingots rose as demand from galvanizers and brass makers stayed strong. The Davis Index for secondary zinc ingot in Mumbai on Monday rose by Rs1,750/mt to Rs170,000/mt ex-works consumer. Secondary zinc producers have raised prices as raw material prices, including new zinc die-cast, old zinc die-cast and dross is up. The Davis Index for secondary zinc ingot in Delhi rose by Rs3,250/mt to Rs175,000/mt ex-works consumer from the prior week. Demand for brass end products was not as expected said brass manufacturers. This could result in a slump in demand for zinc secondary ingot in the coming week. 


The market for secondary zinc ingot was reinforced as spreads widened marginally from the preceding week in both Mumbai and Delhi. For Mumbai, spreads widened slightly by 0.46pc as domestic prices rose by 1.04pc from the previous week, while in Delhi it expanded by 1.27pc as domestic prices rose by almost 2pc. 


The Davis Index for new zinc die-cast was flat to up as it increased by $2/mt and settled at $1,905/mt cfr India port. Offers from US are increasing driven by strong demand from Asian countries. Indian importers are bidding around $1,880-1,890/mt while transactions settled at index price. LME zinc has been falling for three straight sessions which might result in scrap and ingot prices to drop in the coming weeks. 


Zinc Alloy

The domestic market for zinc alloy has improved considerably with a strong and improved demand from auto sector and infrastructure sector, stated North India-based producers. Orders from gas regulators are also strong. Growth is gradual but demand has not reached pre-COVID levels. 


The weekly Davis Index for Zamak #3 settled at Rs217,140/mt del India consumer up by Rs390/mt and the index for Zamak#5 settled at Rs220,040/mt del India consumer up by Rs290/mt on Monday. 


Prices of primary zinc or Special High Grade (SHG) zinc was between Rs208,000-215,000/mt up in line with LME zinc. SHG is consumed by galvanizers who also raised prices of dross as their raw material cost increased. Zamak is also producer from primary zinc and thus prices of Zamak rose too over the week.


In the coming week, prices may be flat due to stagnant demand amid a rise in COVID-19 cases. The market for zinc may have reached a state of equilibrium, said a Delhi-based trader. 




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