India: Imported aluminium scrap prices remain range-bound w-o-w, certain grades see tight supply

• Shortages keep Taint Tabor, 6063 tags firm
  
  
• LME aluminium levels decline by 2% w-o-w
  
  

Imported aluminium scrap prices in India remained range-bound w-o-w, with fluctuations of up to 1.5%, amid moderate demand. Despite a decline in London Metal Exchange (LME) aluminium prices, certain scrap grades held firm w-o-w amid reports of supply shortages.

BigMint's benchmark assessment for Tense scrap originating from the UAE stood at $1,800/tonne (t), firm w-o-w, while Zorba 95/5 from the UK was at $2,110/t, stable w-o-w, both CFR west coast, India.

This week, LME prices dropped by around 2% to $2,530/t. Meanwhile, stocks at LME-registered warehouses stood at 672,525 t, falling by around 7,000 t w-o-w from 681,600 t.

LME aluminium prices have fallen below $2,600/t, influenced by a 3.6% y-o-y rise in China's production in November 2024, which stood at 3.71 million tonnes (mnt), and concerns over lower demand during the winter. This drop also reflects expectations of slower construction.

Market scenario

This week, the overall Indian imported aluminium scrap market remained largely stable, though bid-offer disparities were seen for some grades.

A shortage of higher-quality aluminium scrap, including Taint Tabor, Extrusion, and Wheels emerged in the market. US-origin material, particularly Taint Tabor and Extrusion, was scarce, as domestic demand was strong. Domestic prices of the 6063 alloy were in the range of $2,350-2,450/t. Exporting these materials requires additional bailing and cleaning and long transit times of 30-35 days.

In contrast, UAE-sourced material was increasingly preferred, driven by shorter transit times of just 7-10 days. This led to higher demand for UAE-origin scrap, with it being a more efficient and timely option for importers.

A trader informed, "LME aluminium prices are down, and buyers are pushing for lower prices. However, due to material shortages in grades such as Taint Tabor, 6063, and Wheels, suppliers are unwilling to reduce their offers. As such, prices of these grades are firm. Additionally, supply from the export market has also declined due to the commencement of the winter holidays."

EU Waste Shipments Regulation (WSR) - will India be able to import scrap from EU27?

India faces limited time to engage with the EU ministry to secure hassle-free access to scrap from the EU27. If India fails to meet the requirements for importing non-ferrous scrap (as per EU's WSR), the country may be forced to rely on alternative suppliers, such as the Middle East, the US, and other Asian nations. However, supply from these regions is already tightening, which could further complicate matters.

The EU is a key supplier to India, providing around 0.4-0.5 mnt of non-ferrous scrap annually, with aluminium scrap accounting for 60-70% of that volume. If the EU supply chain is disrupted, India could look to the US, but domestic demand there is rising, especially due to the development of new rolling mills, leaving less material available for export.

In the Middle East, countries such as Oman, Qatar, and Bahrain have already imposed scrap export restrictions, and Saudi Arabia may follow suit as it ramps up infrastructure projects and rolling mill capacity. Additionally, the UAE's major aluminium alloy manufacturing mills have increased recycling capacity, particularly for high-grade aluminium scrap such as Taint Tabor, Extrusion, and Wheels, which could lead to reduced exports. Expectations are that by 2027, the UAE might also consider limiting scrap shipments.

In Asia, weakening currencies could prompt countries in the region to prioritise domestic consumption of scrap, further tightening the global supply.

Domestic scrap remains steady

In the domestic market, Tense scrap prices in both Delhi and Chennai remained stable w-o-w, while other grades also remained steady. According to BigMint's assessment, domestic Tense scrap stood at INR 174,000/t ex-Delhi-NCR and INR 175,000/t ex-Chennai.

China's silicon prices stable

According to BigMint's assessment, prices of China's 553-grade silicon remained stable w-o-w at $1,680/t CFR Mundra. Freights were at around $2,000-2,300 for a single container from China to Mundra.

Prices of silicon remained stable w-o-w despite weak demand in the domestic alloyed ingot market. Additionally, alloyed ingot manufacturers claim to have sufficient inventories of silicon, which further kept prices stagnant.

Outlook

India's imported aluminium scrap prices are likely to stay within a narrow range in the near term. With the upcoming winter holidays, export markets are expected to reduce supply and close temporarily, potentially causing shortages and helping keep prices firm.