As the COVID-19 related lockdown continues in India, zinc scrap and alloy markets stay shut to comply with the government rules. Thus, no trades were reported in silent markets for a second successive week.
The weekly Davis index for galvanizer’s dross settled flat at Rs146,325/mt ($1,920/mt) ex-works Mumbai producer and Rs150,783/mt ex-works Delhi producer on Monday. Galvanizers have shut shop and dross production has come to a standstill at present. Zinc oxide producers, who use dross as a raw material are already reeling under losses with no trades amid the shutdown. Manufacturers believe it would take them the next two quarters to offset losses arising from the halt in trade.
Zinc dross demand is likely to rise after mid-April in sectors like pharma and ceramics, which have already resumed inquiries. Major consuming sectors of zinc oxide like the tyre industry accounting for 65-70pc of the consumption and the auto industry, however, could be slow to recover.
The Davis index for secondary zinc ingot settled at Rs159,700/mt ex-works Mumbai consumer, flat from the week prior. Ingot makers now wait for markets to reopen, keen to sell their piled-up inventories.
Manufacturers are unsure of the price direction considering the severe hit global economy has taken. The weekly Davis Index for secondary zinc ingots settled at Rs159,950/mt ex-works Delhi consumer, also flat in a quiet market.
The Davis Index for new zinc diecast settled at $1,456/mt cfr India port, flat from the prior week. There were no import bookings or inquiries for new zinc diecast from Iran, Russia, Korea and Japan. A few shipments are stuck at ports awaiting clearance by the authorities. Indian importers are taking a step back from buying as the Indian currency continued to depreciate during the lockdown. Indian rupee stood at Rs76.02 against US$1 on April 6, from Rs73 before the COVID-19 pandemic hit the country.
The Davis Index for Zamak #3 settled flat at Rs170,533/mt del India consumer and the index for Zamak #5 settled at Rs174,033/mt del India consumer, also flat from the week prior.
Sellers faced difficulties adhering to delivery schedules for earlier bookings with limited availability of inland transportation and shortage of labour at loading/unloading points. Freight charges have also surged.
The official three-month LME zinc contract settled at $1,876 on April 3, up by $14/mt from $1,862/mt on March 27. Primary zinc manufacturers in India have also announced a temporary suspension in production.
($1 = Rs76.02)