India's imported aluminium scrap prices see minor drops w-o-w amid a 3% decline in LME

Aluminium scrap prices in India remained relatively stable with minor price decline seen in a few grades owing to a w-o-w drop in LME aluminium prices. At present, buying activities in the market are sluggish as buyers are awaiting for further price correction and election results.

The price of aluminum on the LME has dropped significantly this week. Three-month LME prices fell by 3% compared to last week, settling at $2,641/t. This comes after a two-year peak of $2,729/t just a week before.

According to BigMint's assessment, tense (8-9%) originating from the UAE remained stable at $1,930/t, CFR Mundra. Meanwhile, extrusion from the UAE dropped by $100/t, settling at $2,460/t, CFR Mundra.

Additionally, talk scrap prices from the US and UAE fell by over 4% due to a 5% decrease in LME copper prices. At the time of reporting, LME copper prices were recorded at $9,984/t from the previous week's $10,501/t.

Market insights

A buyer informed BigMint, "Buyers are holding off on buying scrap as of now, hoping for prices to drop further. The market is volatile right now, with prices fluctuating wildly. "

Even though aluminum scrap prices dipped a bit this week, there is a big gap between what sellers want and what buyers are willing to pay for certain types of scrap. Some sellers are still asking high prices, but buyers are offering much less - sometimes $70-80/t lower. This is likely because businesses are having cash flow problems due to the elections.

A trader source mentioned, "The market participants are waiting for the election results, which is to be announced on 4 June 2024 (today). Aluminum scrap prices might see a small jump ($5-$10/t) after the election results, but it won't last. The market expects buying to pick up again then. Many participants are currently holding off due to election-related cash flow issues, but that pressure should ease once results are announced."

According to BigMint's assessment, taint tabor originating from the US was seen increasing marginally by around $30/t w-o-w, reaching $2,070/t, CFR Mundra. Taint tabor offers from the US are staying high, even though global prices have dropped. This is because demand seems strong within the US domestic market. US suppliers are asking for $2,100-$2,130/t for taint tabor, but Indian buyers are not willing to pay that much.

China's silicon market

According to BigMint, prices of China's silicon 553 have a slight increase w-o-w, settling at $2,010/t CFR Mundra. Sky-high shipping costs are the sole reason behind the price increase. Right now, it costs nearly $4,500 per container to move a 20-foot container from China to India.

Meanwhile, the local price of silicon in Delhi NCR remained largely stable at INR 183,000-INR 184,000/t levels.

Domestic scrap market

In the domestic market, tense scrap prices have risen by INR 1,000/t. BigMint's assessment shows domestic tense scrap prices (ex-Delhi NCR) at INR 189,000/t.

Outlook

In the near term, it is anticipated that the buying activity in the market might resume and the prices might see a further correction. The volatility is temporary and linked to the political climate. Once the election results are declared, it is expected that the market will regain clarity.