Weekly round-up: Domestic base metals markets mirror global trends; copper gains on supply concerns

At close of trading on Friday, 16 August 2024, base metals prices on the London Metal Exchange (LME) exhibited positive trends. Copper recorded the largest gain, rising by 2.81%. Meanwhile, stocks at LME registered warehouses saw varied trends, with zinc witnessing the highest inflow of 8.6%.

This week, the domestic market mirrored global trends. Imported aluminum prices increased by 1.8%, and copper and lead also experienced weekly gains. All base metals prices rebounded, buoyed by a recovery in futures prices. While market participants grew more confident, trading activity remained low, likely due to the upcoming holidays next week. Despite reduced trade volumes, local prices reacted positively to the rise in futures markets.

Aluminium

Imported market: Imported aluminium scrap prices in India have gained slightly w-o-w amid rebound in LME prices this week amidst cautious approach among market participants and low purchase enquiries. Additionally, ahead of upcoming holidays in local markets, bid-offer disparity emerged in the market with buyers adopting a wait-and-watch approach.

According to BigMint's assessment, Tense scrap from the Middle East, particularly the UAE, saw a increase of $30/t, settling at $1,730/t. Zorba 95/5 from the UK remained rangebound at $1,950/t CFR west coast, India.

Aluminium alloy: Spot prices of aluminium ADC12 alloy ingots (non-OEM) in Delhi NCR and Chennai fell w-o-w, as per BigMint's latest assessment. In the Delhi-NCR region, ADC12 spot prices were assessed at INR 207,000/t ex-Delhi. Likewise, ADC12 prices in Chennai were reported at INR 209,000/t on immediate payment basis, excluding GST.

The current spread between tense and ADC12 spot levels is at INR 33,000-34,000/t.

Domestic: In the domestic market, tense scrap prices moved up on LME rebound in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 175,000/t ex-Delhi NCR and INR 176,000/t ex-Chennai.

Copper

Imported: Copper motor mix scrap prices are being offered at $1,200-1,250/t by sellers based in the EU and the US. However, these prices seem to be higher than the bids currently being placed. Meanwhile, US-origin talk scrap was at $4,690/t, 1.5% w-o-w rise, Middle East-origin prices were recorded at $4,470/t, up by 0.2% w-o-w.

A major workers' union leading the strike at BHP's massive Escondida mine, which accounted for nearly 5% of global copper production in 2023, aims to disrupt operations at the site. A strike at BHP's Escondida mine in Chile has entered its third day, raising concerns over copper supply and boosting global prices.

Domestic: Domestic copper armature prices are assessed at INR 737,000/t exy-Delhi, reflecting an increase of 1.5% w-o-w. Prices of secondary CCR rods (99%) were at INR 783,000/t ex Delhi, rising by 1.7% w-o-w. Meanwhile, primary CC rods were observed at INR 815,000/t, up by 2.5% w-o-w.

Zinc, lead

China base metals market overview

In the week ending 16 August 2024, deliverable stocks of base metals in Shanghai Futures Exchange (SHFE)-registered warehouses displayed mixed trends. Notably, lead saw a significant inflow, increasing by over 53% w-o-w to reach 60,617 t, according to the exchange's weekly stocks report.

Global updates

• A strike at BHP's Escondida mine, crucial for global copper, may disrupt supply chains for Chinese smelters, impacting refined copper production.
  
  
• In June 2024, U.S. aluminium scrap exports dropped 9.72% m-o-m and 0.91% y-o-y. Limited rolling mill grade scrap and stockpiling for new mills are tightening supply and pressuring exports, especially of taint tabor grade.
  
  
• Aluminium Bahrain reported robust Q2CY'24 results, with EBITDA surging by over 40%.