India's imported aluminium scrap prices firm w-o-w despite LME downtrend
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Aluminium scrap prices in India remained firm this week, with some grades experiencing slight price increases despite a small decline in LME aluminium prices. The firm prices were driven by persistent material shortages. At present, buying activities in the market are sluggish as buyers adopt a wait-and-see approach.
At the time of reporting, the three-month LME prices remained largely stable at $2,582/t with a marginal 0.7% decrease compared to the previous week's $2,600/t. Stocks were recorded at 492,750 t, marking a 1.5% decrease w-o-w.
As per BigMint's assessment, prices of imported aluminium scrap in India have remained steady, reflecting the trajectory of aluminium futures on LME. Tense scrap sourced from the US witnessed a marginal $10/t increase, reaching $2,010/t, while zorba 95/5, originating from the UK, was priced at $2,170/t. Tense scrap from the Middle East, particularly the UAE, remained unchanged at $1,980/t CFR Mundra.
Meanwhile, Talk scrap origination from the US and UAE witnessed a rise in prices over 3% owing to the 2% rise in LME copper prices. Notably copper prices in the LME have hit a 2-year high i.e. over $10,000/t levels.
A trade source mentioned that there is a scarcity of wheel scrap due to suppliers preferring to sell within the domestic market of the UK, where they can achieve higher prices compared to exporting to India. Indian buyers are requesting a discount of $100/t below LME levels, which is dissuading suppliers from exporting to India. Meanwhile, suppliers in the UK's domestic market are able to sell the material at prices that are range-bound and close to LME levels.
BigMint's assessment of wheels stood at $2,470/t CFR Mundra, up by $20/t from the previous week.
A buyer source informed BigMint, "There is a bid-offer disparity in the market for wheel scrap. Suppliers are not willing to offer the material below $2,500/t."
At the same time, there has been a notable increase in demand for taint tabor in the market, with buyers showing a willingness to pay a premium to secure the material. This heightened demand for taint tabor can be attributed to the shortage of tense scrap in the market. Taint tabor is being seen as a viable alternative for producing alloy ingots, driving up its demand.
An alloy manufacturer mentioned, "Prices of imported aluminium scrap have remained relatively stable without significant fluctuations. Additionally, LME prices have experienced a slight decline following several weeks of consistent increases. Despite this, buying activities in the market are notably slow. Alloy manufacturers in the southern region have been actively sourcing ADC12 ingots from the Asian region instead of purchasing scrap."
China's silicon market
As per BigMint's assessment, prices of China's silicon 553 remained stable at $1,880/t CFR Mundra. Additionally, the tentative export prices (FOB) for silicon 441-grade stood at $1,880-$1,920/t.
According to a source, purchasing activity in the market remains subdued as buyers already have stocks of silicon. They acquired the material when prices were low a few weeks ago.
Global updates
China witnessed a robust demand for aluminum, with imports soaring by 89.8% to 380,000 t in March. First-quarter imports totalled 1.1 mnt, marking a 92.3% y-o-y increase. Concurrently, China's primary aluminium output in March rose by 7.4% to 3.59 mnt, driven by escalating prices and industry profits.
The resurgence of China's manufacturing sector after six months further amplified aluminium demand, notably in automotive, construction, and packaging sectors.
Domestic scrap market
BigMint's assessment of tense scrap prices in the domestic market (ex-Delhi NCR) stood at INR 189,000/t. This reflects a slight decrease of 1.6% from the previous week's INR 192,000/t, ex-Delhi. This slight decline in prices is linked to the slight downward correction observed in LME prices.
Recent deals
Around 20 t of taint tabor HRB (2-3%) originating from the US was heard traded at $2,030/t, CFR Mundra.
50 t of Middle East taint tabor (2-3%) was traded at $2,020/t, CFR Mundra.
A deal for 50 t of zorba 96/6 from Denmark was traded at $2,270/t, CFR Mundra.
Outlook
Aluminium scrap prices are anticipated to remain firm in the near term due to limited supply in few specific grades amid ongoing geopolitical tensions, and a possible impact from changes in aluminium LME prices.
