India: Imported aluminium scrap prices fluctuate w-o-w as LME hits 4-month high

• Recent stimulus measures in China boost sentiments
  
  
• Bid-offer disparities keep buyers cautious, trade muted
  
  

Imported aluminium scrap offers into India fluctuated by up to 4% w-o-w as aluminium prices on the London Metal Exchange (LME) hit a 4-month high, following the Federal Reserve's rate cuts and China's new monetary stimulus and support for the property market.

Base metal prices fluctuated within a narrow range during the LME trading session, as a surge in Chinese property stocks, buoyed by last week's stimulus measures, boosted sentiment ahead of China's Golden Week holiday. As per sources, "China has returned to aggressive buying of base metals after months of inactivity. Though the country is currently in holiday mode, demand is expected to increase significantly once activity resumes."

Meanwhile, transactional activities remained on the lower side for some grades due to significant bid-offer disparities.

Three-month LME aluminium prices hovered at $2,630-$2,640/tonne (t), up 2.9% w-o-w. Stocks at LME-registered warehouses stood at 792,950 t.

Higher prices keep buyers cautious

A manufacturer explained, "Aluminium scrap prices have remained volatile with high offers w-o-w, mainly due to the LME's rebound to a four-month high, following the Federal Reserve's rate cuts. However, despite the price increase, buying activity in the imported aluminium scrap market remains cautious. Current offer prices are higher than anticipated, which has prompted most buyers to limit their purchases to the minimum required to keep operations running."

Fewer local transactions despite elevated inventories

A seller noted, "Domestic ingot producers are holding on to raw materials purchased at higher prices to avoid selling at a loss, leading to elevated inventory levels. With the current high LME prices, sourcing raw materials at lower costs has become challenging. To preserve liquidity, producers are reducing the number of transactions."

A trader stated, "A few weeks ago, buyers were avoiding zorba scrap due to price disparities, to the point it had driven up prices of other alternative grades. However, now, major buyers in India have resumed purchasing zorba 95-5."

Talk originating from the US was assessed at $5,080/t, while talk from the Middle East was priced at $4,950/t, both up by nearly 3.2% w-o-w CFR west coast, India. Offers from Columbia were heard at 52.75% of the LME CFR Chennai.

This week, a $40/t fall was observed in US taint tabor prices, bringing them to $1,950/t CFR on India's west coast. Suppliers are offering $2,010-2,030/t, while bids remain at around $1,870-1,890/t, highlighting a significant gap between bids and offers.

Chinese silicon remains stable

According to BigMint's assessment, prices of China's silicon 553 remained stable w-o-w at $1,670/t CFR Mundra. Meanwhile, offers from the suppliers' side were at $1,740-1,750/t.

Domestic scrap prices hold firm

In the domestic market, tense scrap prices remained largely stable w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices stood at INR 175,000/t ex-Delhi NCR and INR 176,000/t ex-Chennai.

Outlook

In the coming days, prices are likely to stay on the positive side, supported by rising LME aluminium prices. Trading activity is expected to increase as the festive season approaches.