The Davis Index for galvanizers dross Monday fell by Rs1,814/mt ($23.85/mt) to Rs143,075/mt ex-works Delhi producer from the week prior as end-user demand diminishes. Galvanizers were pressured to lower offers to match bids. In Mumbai, the index for galvanizers dross dropped by Rs675/mt to Rs144,325/mt ex-works producer from the week prior amid limited trades.
Weak demand from tyre and paint sectors is impacting demand as major Indian cities struggle to cope with rising COVID-19 cases. In South India, Chennai has re-imposed a lockdown until the end of June. Galvanizers said that market fluctuations will persistent until the end of June. Oxide producers have cut production by 50pc from pre-COVID-19 levels in-line with low demand.
The threat of a second wave of virus cases in some parts of India has turned market participants cautious. Manufacturers and traders have reduced their buying volumes in line with lower production levels. Producers of secondary zinc ingots are following the market ‘mantra’ of low production to match extremely low demand from brass manufacturers and local galvanizers.
Traders found it difficult to match offers to bids this week. The weekly Davis Index for secondary zinc ingot Monday slipped by Rs1,250/mt to Rs154,950/mt ex-works Delhi consumer from the prior week while the index for Mumbai fell by Rs250/mt to Rs151,950/mt. In Mumbai, prices are supported by the fact that production has just restarted and manufacturers are looking to ramp up production before the onset of monsoon when markets slow further.
With the Indian rupee depreciating from Rs75.4 in early June to Rs76.4 against the US dollar over the week, the import prices of new zinc diecast have increased for importers.Also, high offers in the global markets have kept traders from importing scrap despite an improvement in demand in the domestic market.
New zinc diecast prices Monday rose by $299/mt to settle at $1,669/mt del India port from the week prior as secondary zinc manufacturers in Jamnagar bought scrap to ramp up production ahead of monsoons, said traders.
Zamak prices increased on Monday as LME rose by $73/mt to $2,076/mt from the week prior. The Davis Index for Zamak #3 rose by Rs3,833/mt to Rs190,000/mt del India consumer Monday from the week prior and the Index for Zamak #5 increased by Rs3,556/mt at Rs193,000/mt del India consumer. Prices of primary zinc rose Rs5,600/mt from the week prior to approximately Rs185,100/mt, pulled by LME gains. Zamak prices also improved in line with LME and primary zinc prices.
Across India, die-casters and Zamak producers are yet to return to full capacity. Market participants are getting accustomed to the new demand level, which is 50pc lower than a year ago, but are wary of uncertainties induced by the pandemic.