India: Imported aluminium scrap market shows positive trends as demand improves

The Indian market for imported aluminium scrap has recently seen a notable upswing in prices driven by a surge in futures, increased freight rates, limited availability of material in the western part of the country, and heightened demand. Prices of all grades of aluminium scrap significantly increased by $60-70/t w-o-w.

As per BigMint's assessment, Tense scrap, Middle East-origin, has increased by $60/t to $1,720/t. Meanwhile, scrap prices from the US have increased by $35/t, currently standing at $1,775/t, w-o-w.

A market insider revealed that conflict in the Red Sea has kept freight rates elevated contributing to the surge in scrap prices, particularly in western India. Additionally, there is discrepancy in bid-offer dynamics for certain scrap grades.

A reliable source pointed out that the ongoing winter season has led to a slowdown in regular procurement as well as dispatches by the UK- and US-based sellers, causing bottlenecks in the recycling process due to material shortage.

Recently, around 250 t of aluminium Zorba 95-5 scrap of Europe-origin was sold at $2,030/t, with immediate loading in comparison to usual shipment period and fetched higher realisations CIF WC India, as per a credible source, but this deal is yet to be confirmed with the seller source.

Meanwhile, understanding the Middle East market has proven challenging, with sellers increasing prices in response to higher bids. Talk scrap from the Middle East and USA has increased by up to $180/t. This rise was due to the recent hike in copper's three-month LME cash prices. Currently, copper LME prices are hovering at $8,577/t.

The three-month futures for aluminium are at $2,260/t, up by $87/t w-o-w. Aluminium inventories in LME warehouses closed at 542,750 t.

China-origin silicon 553 prices are at around $2,110/t CIF Mundra.

Domestic market

In the domestic space, the scarcity of raw materials, particularly Tense scrap, has kept prices on the higher side. Tense scrap prices are at INR 163,000/t, while utensil scrap prices are at INR 167,000/t exy-Delhi (excluding GST).

Recently, Maruti Suzuki India Limited (MSIL) announced its monthly settlement price for ADC12, which increased by INR 8,500/t to INR 199,500/t for February 2024, which is yet to be absorbed in the market.

Outlook

Looking ahead, considering the prevailing market trend it is anticipated that prices may continue to remain supported.