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

The weekly Davis Index for major zinc grades in India rose between 1-4pc in the week ending August 24 driven by higher demand which pushed offers up from the previous week. Also, the official three-month LME zinc rose to $2,474.5/mt, up by $95/mt or 4pc on Friday from the week prior, supporting zinc scrap and primary zinc prices, globally. 


New zinc diecast

The Davis Index for new zinc diecast rose by $36/mt and settled at $1,838/mt cfr India port on Monday from the week prior. Offers have increased amid an apparent shortage of material from the US, said importers, but trades are occurring despite high offers driven by steady demand in India. 


Prices are at a-year’s high owing to pent up demand from the economic recovery. The market for new zinc diecast in India weakened with spreads for the grade widening from LME zinc compared to the previous week by approximately 1pc despite new zinc diecast prices rising by 2pc from the previous week. 


Galvanizers dross

The Davis Index for galvanizers dross in Mumbai on Monday settled higher at Rs153,750/mt ($2,075/mt) ex-works producer, up Rs4,442/mt from the prior week. The index rose by about 4pc on the back of a shortage of material with galvanizers in Mumbai amid low galvanizing orders due to monsoons. This is however seasonal and market participants did anticipate it, leading to healthy orders of dross by traders and zinc oxide manufacturers for the whole of August.


Monsoon projection is healthy this year according to the Indian Meteorological Department. Zinc oxide manufacturers are in stocking mode as zinc dross prices may rise further in the coming weeks. Retail of zinc oxide is also healthy driven by healthy orders from tyre and paint sectors. The Davis Index for galvanizer’s dross in Delhi rose by Rs6,319/mt to Rs161,875/mt ex-works producers on Monday from the prior week. Prices in Delhi are rising on the back of LME zinc gains and improved demand from oxide makers, just like it is in Mumbai. 


The prices of dross this week marked a-year’s high at around Rs161,000-163,000/mt, crossing dross price of around Rs160,000/mt in January. This proves that the effects of the pandemic are slowly wearing off and the market is stabilizing. The market for dross in both Mumbai and Delhi strengthened with spreads narrowing by a little over 1pc from the previous week with the index prices rising by 3-4pc. 


Secondary zinc ingot

The Davis Index for secondary zinc ingot rose by Rs3,000/mt on the back of robust trades to Rs166,500/mt del Mumbai consumer. Brass makers have upped their production and are searching for scrap material across India. Brass makers in Uttar Pradesh and Jamnagar are buying scrap in bulk as prices are expected to move further up. Prices of copper also rose on Friday from the previous week which could push  brass prices up in the near term. 


Also, galvanizers that use secondary zinc ingot are bidding lower rates of Rs160,000-162,000/mt as orders for galvanizing are less and it is not quite a viable option to buy at the current price range, quoted a galvanizer in Delhi. The Davis Index for secondary zinc ingot in Delhi rose by Rs1,800/mt to Rs169,750/mt del consumer from the week prior. 


The market for secondary zinc ingot in both Mumbai and Delhi weakened as spreads for ingots narrowed by 1pc from the previous week. A higher jump in LME levels led to narrowed spreads for ingots. There is still enough room for prices to grow which will only be driven by higher demand in the domestic market. 


Zinc alloy

The Davis Index for Zamak #3 on Monday rose by Rs3,900/mt to Rs210,250/mt del India consumer from the preceding week and the weekly index for Zamak #5 also rose by Rs3,900/mt to Rs213,250/mt del India consumer from the week prior. Demand is rising for the material said most manufacturers in Delhi and Faridabad regions. Die-casters in the south said orders for zinc diecast parts are gradually rising.


The market for zinc alloy weakened as spreads for both Zamak #3 and Zamak #5 narrowed by over 1pc from the previous week despite alloy prices rising by almost 2pc from the previous week.


Most auto companies with plants in south India have ramped up production. In the north, demand for Zamak is steady from the infrastructure sector, with the auto sector slowly catching up. The prices of raw material to make Zamak, primary zinc, is also up resulting in prices of Zamak to climb. 


Primary zinc was at around Rs205,200/mt as on August 13, prices were not revised since then. Prices could be revised upwards in the coming weeks as primary zinc moves in line with LME zinc.



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