India: Imported aluminium scrap prices post weekly gains despite LME downtrend

Imported aluminium scrap prices in India drifted higher w-o-w despite a drop in LME aluminium prices. Meanwhile, transactional activities remained on the lower side due to significant bid-offer disparities seen in the market.

Meanwhile, the three-month LME aluminium prices hovered at $2,400-$2,410/t, down 5% w-o-w. Stocks at LME-registered warehouses stood at 847,425 t. Notably, according to LME data, aluminium prices fell to a two-week low following reports of ongoing factory activity slowdown in China, the world's largest consumer, in August.

BigMint's benchmark assessments show that Tense from the UAE was priced at $1,830/t, up 0.8% w-o-w, while Zorba 95/5 from the UK was assessed at $2,080/t, both CFR West Coast, India.

A trader source informed, "Despite the decline in LME aluminium prices, the imported scrap market remains elevated. Offers from the EU/UK suppliers are high due to improved domestic market conditions after the holidays, which is driving up export prices. Additionally, Zorba offer levels from this region are currently not viable for Indian buyers."

The increase in imported scrap prices has led alloy manufacturers to focus more on directly importing alloy ingots due to rising volatility in scrap prices. Additionally, offers for Trump (10-12%) were heard at around $1,860-80/t levels.

A buyer source said, "Although LME aluminium prices have dropped, global freight rates remain high due to strong container demand. However, they are beginning to soften. Further declines in freight rates are anticipated."

This week, BigMint's assessment shows a $45/t increase in Taint Tabor prices, which reached $1,990/t CFR west coast, India. Suppliers are offering Taint Tabor at $2,010-$2,030/t, while bids are around $1,960-$1,980/t, creating a notable bid-offer gap. The high offer levels are attributed to reduced supply of the material in the market. This shortage, particularly from the US, has also contributed to higher UAE TT levels.

Talk prices trends

Talk originating from the US was assessed at $4,815/t, while Talk scrap from the Middle East was priced at $4,600/t, both down by up to 3.5% w-o-w, CFR West Coast, India.

The drop in Talk scrap prices is attributed to fluctuations in LME copper levels, which fell to a two-week low due to weak Chinese economic data and concerns about reduced demand from China's manufacturing and property sectors. Additionally, flooding in Ahmedabad has put pressure on the talk business, impacting its performance.

A source informed BigMint, " Currently, plants using Talk scrap as feed material are running at 30-40% capacity due to decreased demand. Additionally, buyers are hesitant to purchase imported material because of ongoing volatility in copper prices. "

China's silicon market

According to BigMint's assessment, prices of China's silicon 553 stood stable w-o-w at $1,720/t CFR Mundra. Meanwhile, the offers from supplier side were at $1,750-60/t levels and bids were heard at $1,700-10/t levels.

Sea freight rates from China to Mundra have remained largely stable w-o-w, ranging from $1,500 to $1,600 per 20ft container.

Additionally, market sources anticipate an increase in silicon prices in the coming weeks due to a slight improvement in demand.

Domestic scrap market

In the domestic market, tense scrap prices inched down w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 176,500/t ex-Delhi NCR and INR 177,500/t ex-Chennai.

Due to decreased demand for domestic scrap, buyers remain reluctant to purchase the material, even with lower offer levels.

Additionally, offer levels for domestic Talk scrap in Delhi were at INR 450,000/t, while offers for Talk scrap in Chennai were heard at INR 440,000/t.

Outlook

In the days ahead, prices are expected to undergo a downward correction due to falling LME aluminium prices, although trading activity remains subdued.