India: Imported aluminium scrap prices edge up w-o-w following rise in LME levels, China's export tax rebate cut

• LME prices rise to 6-month high on China announcement
  
  
• Demand picks up in India; higher offers, robust trade seen

  Imported aluminium scrap prices in India edged higher by up to 1.7% w-o-w. BigMint's benchmark assessment for tense scrap originating from the UAE stood at $1,800/tonne (t), up by $30/t w-o-w, while, zorba 95/5 from the UK stood at $2,110/t, up $10/t, both CFR west coast, India.

  The price hike follows the Chinese finance ministry's announcement of a reduction in export tax rebates on aluminium and copper semi-finished products. Effective 1 December 2024, the rate might be cut to nil from 13%.The announcement sparked a jump in aluminium prices on the London Metal Exchange (LME), which rose to a six-month high of over $2,700/t. LME prices are still at over $2,600/t levels, as the market expects a reduction in the outflow of Chinese aluminium to international markets.
  
  

Market sees strong momentum

This week, the Indian imported aluminium scrap market saw an uptick in activity, leading to higher offers amid increasing LME levels, as demand picked up.

A market source stated, "Chinese export firms are rushing shipments before policy changes reduce rebates to nil, threatening profits. Facing resource shortages at the domestic level, China's aluminium producers have already invested in overseas bauxite mines and processing plants. With the new policy, they are likely to expand these projects further, focusing on global operations to stay competitive and mitigate potential losses."

A prominent market player highlighted another emerging trend: "Thailand is emerging as a lucrative market for aluminium zorba, offering realisations that are $60-70 higher compared to India. This price advantage, along with better freight benefits, is driving global sellers to prioritise trading zorba with Thailand to maximise profits."

Meanwhile, sources highlighted that rolling mill items such as taint tabor performed well this week, supported by strong demand. However, the alloy market remains sluggish, reflecting weaker activity and subdued interest in this segment.

China's silicon prices remain stable

According to BigMint's assessment, prices of China's 553-grade silicon remained largely stable w-o-w at $1,730/t CFR Mundra. Meanwhile, offers from the suppliers' side were at $1,760-1,770/t. However, bids were heard lower, at $1,710-1,720/t.

Domestic scrap prices rise w-o-w

In the domestic market, tense scrap prices edged up by INR 1,000/t w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap stood at INR 173,000/t ex-Delhi NCR and INR 174,000/t ex-Chennai.

Outlook

Overseas aluminium prices are expected to remain range-bound in the near term. With winter approaching, supply from Western countries is expected to tighten; in particular, the holiday season, starting from 15 December, is expected to create supply constraints. These factors may slow down trade activities, adding further challenges to the market.