India: Imported aluminium scrap prices fall despite slow scrap accumulation

The Indian aluminium scrap market is currently experiencing a downward trend, primarily due to reduced trading activities and despite a fact of slow accumulation of scrap specifically in the western region owing to the winter season, and a decline in the aluminium LME level w-o-w. According to the SteelMint benchmark assessment of tense scrap Middle East origin prices, they are at $1,540/t, with a decrease of $20/t, w-o-w.

In contrast, SteelMint's assessment of Zorba 95-5, UK-origin, stood at $1,900-1,910/t, up by $90/t. However, it is worth noting that although some buyers have increased their bids for Zorba-grade scrap, their bids still do not match what sellers are quoting in the market, with some sellers offering high prices around $1,930-1,950/t owing to better bids from the Far East region.

Market observers have noted a significant disparity in scrap prices, with fluctuations ranging from $30 to $40/t w-o-w across all grades of aluminium scrap.

On the other hand, scrap of US origin is being quoted at 53% of LME prices, although there is some variation in bids of 0.4-0.5%. Recent negotiations have taken place but have not been confirmed at the time of reporting. Currently, copper LME prices hovered around $8,382/t, slipping by $70/t w-o-w.

At the same time, the three-month futures for aluminium currently hovered at $2,135/t at the time of reporting, reflecting a weekly decrease of approximately $45-50/t. Furthermore, inventories in the LME warehouses stood at 452,375 t at the close of yesterday's trading, inching down w-o-w.

Market participants have noted that high European and UK currency exchange rates are posing challenges for other regions to procure materials in the current market dynamics.

According to a reliable source, mills in southern India have experienced a decrease in production levels since the cyclone struck. Additionally, a few furnaces were unable to operate due to heavy rainfall. As a result, everyone is currently in a wait-and-watch mode, with plans to resume operations next week.

The approaching holidays and snowfall in China have impacted material loading, causing suppliers to raise prices for silicon 553. Currently, China's origin silicon 553 is at around $1,955/t, CIF western coast, India, up by $20/t w-o-w.

Domestic aluminium scrap

In the domestic aluminium scrap market of India, prices have slightly contracted to last week. SteelMint assessment for tense scrap prices stood at INR 153,000/t, while utensil scrap prices were at INR 166,000/t exy-Delhi (excluding GST).

Outlook

Market participants anticipate that the near-term prices are likely to be range-bound or nominal upward correction in the market as domestic availability of scrap seems to be improved, whereas, import prices are less likely to narrow due to slow procurement at most of the recycler's premises.