Indian zinc scrap prices rose in line with the rise in LME zinc in the week ended Oct 26. The official three-month LME zinc contract increased by 6pc or $145.5 to $2,850/mt on Friday from the week prior. Despite the price rise, the market weakened in terms of spreads.
Zinc galvanizer’s dross
In Delhi, the Davis Index for zinc galvanizer’s dross Monday settled at Rs168,333/mt ($2,278/mt) ex-works producer, up Rs3,458/mt from the prior week driven by higher local offers backed by LME zinc’s impressive rise. Few trades closed in the prior week but more are expected in the coming weeks, said traders, adding demand needs a serious boost. The weekly index for zinc galvanizer’s dross in Mumbai rose by Rs334/mt and settled at Rs165,167/mt ex-works producer. Mumbai-based galvanizers rued of tepid demand because of which they couldn’t raise prices in line with LME’s steep climb.
The market for zinc dross in both Mumbai and Delhi weakened as spreads widened in the cities by 5pc and 4pc, respectively. The index for Delhi rose by 2pc and Mumbai up by 0.20pc in a week while the LME zinc contract rose by 6pc in the same interval, which resulted in weakening markets and wider spreads.
New zinc diecast
The Davis Index for new zinc diecast Monday settled at $2,063/mt cfr India port, up by $160/mt amid a shortage of material and LME zinc rally. Importers are waiting for prices to fall in an otherwise low demand market. The market for the imported scrap was the only grade to strengthen last week as spreads contracted by 1.79pc from the prior week. The index rose by 8pc while LME rose by 6pc.
Secondary zinc ingot
The Davis Index for secondary zinc ingot in Delhi Monday rose by Rs3,500/mt to Rs170,000/mt ex-works consumer from the previous week. Brass manufacturers have resumed buying at adequate levels after inventory started depleting, said brass manufacturers from western India. They had complained of inventory build-up in early and mid-October which resulted in demand lags for secondary zinc ingots and pressured prices. The situation could ease in the coming weeks. The Davis Index for secondary zinc ingot in Mumbai rose by Rs3,004/mt to Rs168,154/mt ex-works consumer on Monday from a week ago.
The market for secondary zinc ingots in Mumbai and Delhi weakened as spreads contracted by 4pc each from the week prior. Secondary zinc ingot index for Mumbai rose by 1.82pc and Delhi by 2.10pc compared to the prior week. The rise was not at par with LME zinc’s 6pc rise leading to weakening markets for secondary ingots.
The Davis Index for Zamak #3 rose by Rs10,717/mt to Rs219,050/mt del India consumer on Monday from the previous week. Prices rose across India said diecasters, as offers were revised upwards.
Manufacturers were compelled to increase prices of Zamak #3 and Zamak #5 amid higher raw material prices. Special high-grade zinc prices were revised upwards by approximately Rs12,000/mt to Rs216,200/mt as LME rose on global cues.
The Davis Index for Zamak #5 rose by Rs10,717/mt to Rs222,050/mt del India consumer on Monday from the previous week. The demand for zinc alloys is on the lower side and is only likely to pick up if auto and infra sectors recover at a faster pace, said market participants.
Despite a substantial rise in indexes for zinc alloys, market weakened in terms of spreads which narrowed by approximately 5pc from the previous week. This is an indication that prices have the potential to rise further.