India: Imported aluminium scrap market witnesses volatile price trend

Imported aluminium scrap prices into India continued to remain volatile last week due to price fluctuations in the futures market.

The three-month aluminium futures and spot prices on the London Metal Exchange (LME) drifted down by up to $73/tonne (t) w-o-w. Stocks stood at 496,425 t in yesterday's closing, up by 12,850 t on a weekly basis.

However, the price of imported aluminium scrap has not fallen parallelly. Current indicative offers for aluminium tense scrap from the Middle East, particularly the UAE, are higher by $40/t w-o-w to $1,760-1,770/t till yesterday. Meanwhile, offers of Zorba 95-5 from the UK hovered at $1,880/t with a marginal improvement of $10/t w-o-w.

Global market overview

The UK-based exporters are currently not under selling pressure as they have adequate future bookings. In addition, limited suppliers were offering in the market, resulting in tight supply.

Though offers were floated, healthy transactions did not happen in comparison to the previous days. Further, bids from the Far East nations, specifically Malaysia, Thailand, and Vietnam, are better compared to India.

Notably, prominent buyers have limited their usual trading activities at present and opted a wait-and-watch approach till December as most of the shipments will get delayed due to the approaching Christmas festival holidays followed by the New Year holidays.

Automobile alloys market overview

A few automobile companies in India are anticipated to undertake maintenance shut down at their facilities late this month. This could ultimately have an impact on the domestic aluminium alloy ingot price trend, leading to slight adjustments in scrap prices.

In addition, one of the East Asian countries, has placed higher bids for Indian-origin aluminium alloy ingot ADC12 at around $2,410-2,420/t on CIF basis. This indicates that Indian sellers are getting better realisations in the exports market.

Short term outlook

A few exporters from the UK and USA are expecting that prices may remain supportive in the near term as scrap accumulation is anticipated to slow down. The Middle East region-based suppliers may float higher offers owing to limited western suppliers in the global market.