India: Imported aluminium scrap prices track strengthening futures despite limited trades

The Indian aluminium scrap market has experienced a notable increase in prices recently, mainly influenced by a surge in futures contracts on the London Metal Exchange (LME).

However, transactions remained limited specifically from the western region amid the approaching Christmas festival because of which a few major trade participants are not available in the market.

A reliable source stated that non-ferrous scrap prices remain tight in local markets across Europe and the US, exerting upward pressure on export offers for various scrap grades. The slow accumulation of non-ferrous scrap in local markets has prompted suppliers to seek higher prices in international trade.

Similarly, SteelMint's assessment of Zorba 95-5, UK-origin, stood at $1,955/t, up by $55/t. Market participants indicate a positive shift in prices by $60-70/t w-o-w across grades of aluminium.

The current market scenario benefits other major scrap supply regions like the Middle East, where the Tense scrap prices are recorded at $1,575/t, with an increase of $35/t, w-o-w, as per SteelMint's assessment.

Tense and Taint Tabor scrap are currently securing improved deals from the Middle East, notably driven by the influence of European and US markets. This collaborative dynamic suggests an upswing in near-term prices, signaling a rebound.

Moreover, talk scrap from the US and the Middle East has seen an increase of up to $175/t. This rise was due to the recent hikes in copper's three-month LME's cash prices. Currently, copper LME prices hover around $8,530/t at the time of reporting.

At the same time, the three-month futures for aluminium currently hovered at $2,272/t at the time of reporting, reflecting a weekly increase of approximately $136-138/t. Furthermore, inventories in the LME warehouses stood at 504,475 t at the close of yesterday's trading, significantly up by 52,100 t w-o-w.

In China, the silicon metals market is facing challenges. The southern part of China has switched from hydro-electric power to industrial power due to a water shortage, leading to increased electricity prices, market participants informed SteelMint.

Some silicon metal factories have halted production, and winter weather, including frequent snow, have raised transportation costs. China-origin silicon 553 is at around $2,075/t, CIF Mundra.

Domestic aluminium snapshot

In the Indian aluminium scrap market, prices have remained steady compared to yesterday's closing. Tense scrap prices stood at INR 153,000/t, while utensil scrap prices were at INR 165,000/t exy-Delhi (excluding GST).

Outlook

Market participants anticipate that as the holidays approach, the prices of imports from the Middle East may rebound due to the closure of the US and EU markets during this period. However, there may be need-based imports.