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India witnesses increase in imported aluminium scrap prices w-o-w

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Aluminium

BigMint Bureau

157 Reads

8 Oct 2024, 19:15 IST

India witnesses increase in imported aluminium scrap prices w-o-w

Imported aluminium scrap offers into India increased by up to 4% w-o-w. Offers increased because aluminium prices on the London Metal Exchange (LME) hit a 4-month high recently, following the Federal Reserve's rate cuts and China's new monetary stimulus and support for the property market.

China's return boosts market sentiment

Another factor driving the increase in imported aluminium scrap prices is China's return to aggressive buying of base metals after months of inactivity. With China resuming purchases post-holiday, market sentiment for commodities has strengthened, contributing to the w-o-w price surge.

USA shipment delays tighten supply

A trader said: "The rise in imported aluminium scrap prices can be attributed to the ongoing shortage of material, primarily driven by the suspension of USA Pre-Shipment Inspection Certificate (PSIC) licenses by the Directorate General of Foreign Trade (DGFT). This suspension has caused significant delays in shipments from the US, leading to disruptions across the supply chain. As a result, the reduced availability of imported aluminium raw materials has led to increased domestic demand for scrap, exerting upward pressure on prices w-o-w."

Festive season clears automobile inventories

The festive season in India has led to a significant reduction in automobile inventories, which had reached 60-65 days of stock. Major automakers are offering discounts of nearly 1-2 lakh to clear out stock, boosting demand for aluminium. As inventories are being cleared, aluminium demand is rising, contributing to the w-o-w increase in imported scrap prices despite earlier production cuts during the monsoon season.

A manufacturer informed that aluminium scrap prices have been volatile, with high offers seen w-o-w. The surge is driven by LME prices hitting a four-month high, spurred by the Federal Reserve's rate cuts. However, despite these rising prices, buying activity remains cautious as current offers are higher than expected.

Meanwhile, transactional activities remained on the lower side for some grades due to significant bid-offer disparities.

Three-month LME aluminium prices hovered at $2,580-$2,600/tonne (t), rangebound w-o-w. Stocks at LME-registered warehouses stood at 780,275 t.

BigMint's assessments

BigMint's benchmark assessments showed that tense from the UAE was priced at $1,780/t, down by 1.1% w-o-w, while zorba 95/5 from the UK was at $2,100/t, both CFR west coast, India.

Talk originating from the US was assessed at $5,150/t, while talk from the Middle East was priced at $4,860/t, both down by nearly 1.8% w-o-w CFR west coast, India. Offers from Columbia were heard at 52.75% of the LME CFR Chennai.

Chinese silicon prices inch up post-holidays

According to BigMint's assessment, prices of China's silicon 553 went up w-o-w to $1,720/t CFR Mundra. Meanwhile, offers from the suppliers' side were at $1,740-1,750/t.

Domestic scrap prices remain robust

In the domestic market, tense scrap prices remained largely stable w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices stood at INR 175,500/t ex-Delhi NCR and INR 176,500/t ex-Chennai.

Outlook

In the near term, aluminium prices are expected to remain positive. This was largely driven by the ongoing rise in LME aluminium prices. With the festive season approaching, trading activity is likely to pick up, further supporting the price momentum.