India: Imported aluminium scrap prices rise w-o-w following recovery in futures

Imported aluminium scrap prices in India witnessed an uptrend w-o-w, with fluctuations of up to 2.7%. Amid demand recovery and a rise in London Metal Exchange (LME) aluminium prices, certain scrap grades reported supply shortages.

BigMint's benchmark assessment for Tense scrap originating from the US stood at $1,830/tonne (t), stable w-o-w, while wheels from the UK was priced at $2,475/t, up $65/t w-o-w, both CFR west coast, India.

This week, LME prices rose by around 2.86% to $2,657/t. Meanwhile, stocks at LME-registered warehouses stood at 606,800 t, falling by around 10,000 t w-o-w.

Market insight

A trader source stated that the Indian imported aluminum scrap market showed signs of recovery this week as trading activity picked up following the holiday season. Fresh trade engagements were reported, with transactions involving suppliers from the US, EU, and Australia. However, bid-offer gaps persisted for certain grades, such as wheels from the UK and specific grades from the Middle East, as buyers anticipated corrections in futures prices.

A buyer source stated, "European suppliers are prioritising materials like Wheels and Tense for UK buyers over Indian buyers due to a surge in UK demand post holidays, with buyers offering flat LME pricing for Wheels in the UK".

Additionally, "Zorba 95-5 is yielding better realizations in the Far East and Southeast Asian markets compared to India, leading sellers to divert Zorba shipments to those regions."

It has also been heard that Tense material from the UAE is arriving with higher attachments, prompting buyers to favour material from other origins. Additionally, the UAE has started quoting significantly higher prices for its scrap due to strong domestic demand, leading suppliers to prioritize the local market.

Domestic scrap prices inch up w-o-w

In the domestic market, Tense scrap prices in both Delhi and Chennai moved up by INR 1,000/t while other grades also shown recovery by INR 1,000/t. According to BigMint's assessment, domestic Tense scrap stood at INR 175,000/t ex-Delhi-NCR and INR 176,000/t ex-Chennai.

China's silicon prices fall

According to BigMint's assessment, prices of China's 553-grade silicon declined w-o-w to $1,550/t CFR Mundra. Freights were at around $1,900 for a single 20ft container from China to Mundra.

Silicon prices moved down w-o-w despite weak demand in the domestic alloyed ingot market.

Outlook

India's imported aluminum scrap prices are expected to remain positive in the near term as LME prices are likely to rebound. However, the anticipated price announcement for aluminum alloy ingots by a major automaker for February 2025 is expected to keep the local market and imported bids slightly lower, given the ongoing low demand in the auto sector.