India's aluminium scrap imports marginally up in Feb'24 amid healthy procurement

In February 2024, India experienced a slight increase of 3.5% in aluminium scrap imports compared to the previous month, following a significant 30% decrease in January. However, when compared to the previous year, imports saw a noticeable decline of 11%, according to provisional data maintained by BigMint.

In February 2024, India's imports of aluminium scrap reached 109,435 t, indicating a slight improvement compared to the previous month's figure of 105,704 t. However, there was an 11% decrease in the total import volume of aluminium compared to February 2023, which stood at 122,520 t.

What happened ?

The deceleration in import growth can be traced back to the ongoing challenges in the Red Sea that began around December 2023. Since then, imports have experienced a considerable decline. This disruption in the supply chain has led to a shortage of scrap in the market, particularly affecting aluminum alloy manufacturers who rely on grades such as tense, zorba, taint tabor, troma, and trump.

In February 2024, there has been a slight improvement in imports, primarily driven due to healthy procurement by end-users as there were a strong concern that shipments might get delayed due to geographical conditions specifically red-sea ultimately urged trade participants to book higher import volumes.

As a result, many buyers are currently preferring to purchase from the domestic market. This preference has led to a significant decrease in inventories, causing prices to surge both in domestic and imported materials.

Price trend

At the same time, according to BigMint's assessment, tense mix scrap (8-9%) sourced from the UAE was priced at $1,716/t, marking a roughly 3% increase in February compared to the average price of $1,669/t CFR Mundra. Similarly, a similar trend was observed in the domestic market, where tense scrap reached INR 170,175/t, showing a 6.5% m-o-m increase from INR 159,795/t ex-works Delhi.

Grade-wise and country-wise imports

Discussing the top grades imported, taint tabor led the way with 26,674 t, followed by extrusion at 19,966 t, zorba at 18,351 t, tense at 15,537 t, talk at 5,535 t, and other grades at 23,374 t.

In February, the northern region recorded the highest scrap imports, reaching 48,314 t, followed by the west with 38,167 t, the south with 17,355 t, and the east with 5,600 t.

In February 2024, country-wise imports showed a slight improvement, with the US being the largest supplier, followed by Saudi Arabia, the UK, and the UAE, contributing 23,333 t, 12,669 t, 11,692 t, and 7,662 t, respectively. Imports from other countries totalled up to 48,821 t.

Outlook

The current market conditions are expected to stabilise following the financial year closing or by mid-April. There is a possibility of further increases in both imported and domestic scrap segments due to ongoing shortages and rising demand in the market.