India: Imported aluminium scrap prices drop up to 4% w-o-w on LME downtrend
...
India has seen a notable decline in imported aluminium scrap prices w-o-w, attributed to a decrease in LME aluminium prices. Prices for all grades have fallen by up to 4% this week, leading to market uncertainty and a cautious approach among market participants.
Meanwhile, three-month LME aluminium prices were at $2,225/t, down 4% w-o-w. Stocks at LME-registered warehouses stood at 940,125 tonnes (t). Aluminium prices are still hovering at three-month lows.
Additionally, amid the holidays in Europe bid-offer disparity has emerged in the market.
Market uncertainty, lack of firm offers
A seller source stated: "Prices of all major aluminium scraps have declined. Plant owners are facing challenges with finished materials and a lack of orders, making it difficult to sell in the current market scenario. Despite lower prices, raw material availability remains limited, particularly for Tense and Taint tabor".
A trader source said, "Yard owners, despite having stocks, are unwilling to offer materials until the LME price returns to $2,300/t, resulting in a shortage of supply. Negotiations for UK wheels destined for Chennai and Mundra are ongoing, with premiums up by $50/t on the LME price. Availability of wheel material remains limited".
According to BigMint's assessment, Tense scrap from the Middle East, particularly the UAE, saw a decrease of $60/t, settling at $1,730/t. Zorba 95/5 from the UK also decreased by $25/t to $1,975/t CFR West Coast, India.
Firm offers are scarce, and both buyers and suppliers show little interest in transactions. The market lacks clarity, with some suppliers quoting excessively high prices, while bids are significantly $80-$100/t lower than anticipated.
Wheel scrap originating from the UK has witnessed very low bids, the bid levels are almost at LME (-$100/t) standing at $2,160-2,180/t, CFR Mundra. However, the offers are heard at $2,260-$2,270/t levels.
However USA Wheel sold at 2250/t, CFR Mundra recently.
A source said, "Market participants expect volatility in LME aluminium prices, increasing pressure on imported scrap prices. This is compounded by the onset of the monsoon season in various parts of India, which could further disrupt trade".
According to the latest data from the International Aluminium Institute (IAI), global alumina production in Jun'24 fell slightly by around 1% reaching 11.92 mnt compared with 12.08 mnt in May.
China's silicon market
Prices of China's silicon 553 have dropped $50/t reaching $1,790/t CFR Mundra amid easing freight rates. However, buying interest has stayed low because major aluminium alloy manufacturers have sufficient silicon supplies.
Additionally, the freight rate from China to Mundra was heard at $2,540-$2,560 per 20-foot container.
Domestic scrap market
In the domestic market, tense scrap prices have decreased by INR 2,000/t in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 175,000/t ex-Delhi NCR and INR 175,500/t ex-Chennai. This decline aligns with the falling LME aluminium prices and sluggish market trends.
Outlook
Looking ahead, imported scrap prices are anticipated to drop further amid uncertainties in LME aluminium pricing. Buying activity is also expected to remain at lower levels. However, once the European market reopens from the holidays, prices may turn positive.
