Domestic zinc grades slipped on Monday in Delhi and Mumbai after the government announced strict lockdown in the national capital.
This dampened market sentiment and prices fell compared to the previous week despite an improvement in LME zinc levels. The official three-month zinc LME contract jumped by $42/mt, or 1.70pc, to $2,876/mt on Friday from the preceding week.
Primary zinc prices moved in line with LME levels. In Delhi, primary zinc prices were around Rs234,000-243,000/mt ($3,125-3,245/mt) while in Mumbai it was in the range of Rs233,000-243,000/mt. Prices in both cities jumped by approximately Rs5,000-6,000/mt from the prior week. This resulted in a hike in zinc alloy prices but most zinc scrap material prices dipped over the week.
The weekly Davis Index for zinc galvanizer’s dross in Mumbai settled at Rs184,950/mt ($2,469.95/mt) ex-works producer, down by Rs2,167/mt after offers were lowered to attract trades to use-up inventories. However, trades were low as consumers are wary of demand slowdown from end-users. Markets weakened in terms of spreads for the grade which widened by 2.43pc from the prior week. Lockdown damaged end-user demand and market participants were left distressed after Delhi lockdown was announced, with a similar move possible in Mumbai amid rising COVID-19 cases.
The weekly Davis Index for zinc galvanizer’s dross in Delhi dipped by Rs67/mt to settled at Rs193,283/mt ex-works producer. Market weakened in terms of spreads which widened by 1.51pc. Galvanizing increases in line with demand for steel, but as galvanizers received very few orders, it will affect demand for zinc too.
The weekly Davis Index for secondary zinc ingot in Delhi settled at Rs197,117/mt ex-works consumer, down by Rs3,383/mt as demand has taken a hit amid lockdown. The market for the grade weakened in terms of spreads from the earlier week by 3.10pc. Secondary zinc ingot Delhi prices slipped as brass manufacturers said that demand from end-users has fallen. Many are holding back procurements of secondary zinc ingots. The weekly Davis Index for secondary zinc ingot in Mumbai settled at Rs192,575/mt ex-works consumer, down by Rs2,925/mt as demand is low. The market for the grade weakened in terms of spreads which narrowed by 2.85pc.
The weekly Davis Index for Zamak #3 on Monday settled at Rs247,425/mt del India consumer, up by Rs3,615/mt. Prices are up triggered by LME’s climb and higher primary zinc levels. This prompted zinc alloy producers to hike prices. The Zamak #3 weekly index jumped by Rs3,615/mt to Rs250,425/mt del India consumer. Demand has weakened over the week. Markets have also weakened in terms of spreads which has narrowed for prices of both Zamak #3 and Zamak #5 by under 0.20pc from the prior week.
The weekly Index for imported new zinc diecast rose by $128/mt as offers were pushed up and the index settled at $2,392/mt cfr India port. Some trades were heard at $2,450-2,500/mt on Monday. Prices are up in line with LME levels.
($1 = Rs74.88)