India's imported aluminium scrap prices rise amid supply shortages, rising freight rates

The Indian market is currently experiencing a rise in prices for imported aluminum scrap, attributed to various factors. This includes the upswing in aluminum LME levels, shortages of material both domestically and internationally, and the escalating freight rates.

According to assessments by BigMint, aluminum imported scrap from the Middle East, specifically UAE have notably increased. Tense scrap alone rose by $55/t to reach $1,750/t, while zorba 95/5, UK origin, increased by $15/t to $2,025/t CFR Mundra.

Extrusion 6063 scrap also saw a $20/t rise to $2,135/t, CFR western coast India, while talk scrap from the UAE remained stable at $4,340/t. Freight rates from the European region to the Western Coast of India have nearly doubled post the Red Sea crisis, currently standing at $3,350-4,000 per container compared to the previous $1,600 per container.

Market dynamics reveal a significant disparity between seller's offers and buyer's bids, particularly for tense and zorba, reaching up to $50 to $60/t. Despite this, buyers with urgent material needs are willing to pay premiums.

A buyer informed BigMint, bookings for imported scrap are in place, but uncertainties exist regarding the arrival time, with delays reported. The ongoing shortage of tense scrap in both domestic and overseas markets have led to a notable rise in ADC12 prices in the northern region. The source further mentioned that consignments booked in January-February 2024 are expected to arrive in April or May 2024.

Meanwhile, China's Silicon 553 prices remained stable at $2,030/t, CFR Mundra.

Domestic market

In the domestic aluminum market, tense scrap prices increased by approximately 1%, reaching INR 173,000/t, ex-Delhi. Gujarat reported tense scrap prices at INR 175,000/t on a credit basis and INR 173,000/t for immediate payment.

Outlook

Looking ahead, price increases are anticipated in the near term due to the significant shortage of scrap in the domestic market, posing potential challenges for manufacturers in procuring raw materials and impacting operations.