India: Falling LME prices drag down imported aluminium scrap offers

Imported aluminium scrap prices into India dropped this week as compared to previous week following a significant fall in prices on the major commodity exchanges like London Metal Exchange (LME).

Currently, the market lacks clarity. Some sellers are offering at higher prices. Buyers, on the other hand, are showing limited buying interest due to significant disparities in offers and bids which vary by around $70-80/t.

Some transactions of Australian-origin have concluded recently in last two-three days.

• Extrusion scrap was traded at 92% of LME's three-month prices, with a 1% attachment.
  
  
• A tense scrap deal was concluded at $1,875/t, with 2% Fe content.
  
  
• Wheel scrap was heard to have been sold at a premium of $50-70/t on CIF basis above LME's price levels.
  
  

Although, no major trade activities have been reported. Trade participants shared indicative price references considering fluctuating futures prices.

Furthermore, a couple of traders based in the Middle East region told that very few deals were concluded in the week. However, confirmation for the same has not been received till the time of publishing this insight.

India's domestic aluminium scrap market saw prices remaining stable d-o-d today. Tense prices stood at INR 164,000/t ($1,996/t) ex-yard, while utensil prices were at INR 174,500-175,500/t ($2,127-2,140) ex-yard Delhi. Demand for aluminium scrap has been subdued, particularly amongst small and medium-sized ingot producers, over the past few days owing to volatile futures. Production levels have come down due to a shortage of manpower. Prices are expected to remain low in the near term.

LME trend

Three-month aluminium futures and spot prices on the LME decreased by $107/t w-o-w to $2,330/t from $2,437/t on 18 April. Aluminium stocks were estimated to be at 569,600 t, down from 573,075 t last week.