India: Imported aluminium scrap prices see w-o-w drop amid LME downtrend

Imported aluminium scrap prices in India drifted lower by up to 2.8% w-o-w amid a drop in aluminium prices on the London Metal Exchange (LME). Meanwhile, transactional activities remained on the lower side due to bid-offer disparities seen in the market for some major grades.

The decline in aluminium scrap prices was due to a combination of increasing competition from the Far East and sluggish demand in key markets such as India, where port strikes have disrupted supply chains. The Far East is offering higher prices for scrap materials such as taint tabor (TT), extrusion, and tense, which has put pressure on prices.

Additionally, surging demand for imports globally has aligned prices with the LME, creating a more volatile market, with inconsistent business activity across regions. Price fluctuations are causing suppliers to wait for market stabilisation, while buyers remain cautious about increasing prices amid potential volatility.

Meanwhile, three-month LME aluminium prices hovered at $2,340-$2,350/tonne (t), down 4% w-o-w. Stocks at LME-registered warehouses stood at 834,850 t.

BigMint's assessments

BigMint's benchmark assessments show that tense from the UAE was priced at $1,790/t, down 2.2% w-o-w, while zorba 95/5 from the UK was assessed at $2,070/t, both CFR west coast, India.

Talk scrap originating in the US was assessed at $4,850/t CFR west coast, while talk from the Middle East was priced at $4,650/t CFR west coast, both higher by up to 1.1% w-o-w.

A source informed, "Although prices are on the higher side due to climbing LME prices, currently, plants using talk scrap as feed material are running at 40-50% capacity due to decreased demand. Additionally, buyers are hesitant to purchase imported material because of ongoing volatility in copper prices. "

In July 2024, India's aluminium production amounted to 355,000 t, marking a 3% increase compared to 344,729 t in the previous month. On a y-o-y basis, aluminium production witnessed a slight rise of 2% in July 2024 compared with the corresponding period last year (CPLY).

In July 2024, Canada's aluminium scrap exports touched 56,823 t, a 9% m-o-m increase from 52,114 t in June 2024. In January-July 2024, exports totalled 359,835 t, up by 2% against 351,354 t in the same period last year.

China's silicon market

According to BigMint's assessment, prices of China's silicon 553 declined by $30/t w-o-w to $1,690/t CFR Mundra. Meanwhile, offers from the supplier side were at $1,740-60/t, and bids were heard at $1,760-80/t.

Sea freight rates from China to Mundra remained largely stable w-o-w, ranging within $1,550-1,600 per 20 feet (ft) 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 174,000/t ex-Delhi-NCR and INR 175,000/t ex-Chennai.

Due to reduced demand for domestic scrap, buyers remain reluctant to purchase the material, even at lower offers.

Additionally, offers for domestic talk scrap in Delhi were at INR 440,000-445,000/t, while offers for talk scrap in Chennai were heard at INR 430,000-435,000/t.

Outlook

In the coming days, prices are anticipated to experience a downward correction, driven by declining LME aluminium prices and ongoing labour strikes at key ports. Despite this, trading activity is expected to remain muted.