Weekly round-up: Global, domestic base metals markets reflect divergent trends

At close of trading on Friday, 30 August 2024, base metals prices on the London Metal Exchange (LME) showed negative trends except nickel which rose by 0.05%. Meanwhile, LME warehouse stocks exhibited mixed trends, with nickel experiencing the highest inflow at 2.04%.

On the LME, three-month aluminium futures fell by 3.74% to $2,447/t, and nickel prices edged up by 0.05%, settling at $16,766/t. Copper prices were at $9,235/t, down 0.57%, zinc decreased to $2,897/t, and lead fell by 3.02% to $2,053/t.

This week, the domestic and global base metals markets experienced varied trends. Notably, imported aluminium prices increased by upto 6.5%, moreover, copper and lead prices also increased up to 2%.

Aluminium

Imported market: Imported aluminium scrap prices in India drifted up w-o-w amid the rise in LME prices. Prices of all grades inched up by up to 6% this week amidst resumed purchase enquiries. Aluminium prices continue to go up after hovering at three-month lows. According to BigMint's assessment, tense scrap from the Middle East, particularly the UAE, saw an increase of $35/t, settling at $1,815/t. Zorba 95/5 from the UK was up by $20/t to $2,020/t CFR west coast, India.

Domestic scrap: In the domestic market, tense scrap prices edged up w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices stood at INR 178,000/t ex-Chennai. Market participants expect prices to move up in the near term.

Aluminium alloy: In July, total imports of aluminum alloyed ingots saw a significant m-o-m increase of 26%, with the total volume rising from 17,965 t in June to 22,644 t in July.

Spot prices of aluminium ADC12 alloy ingots (non-OEM) in Delhi NCR and Chennai increased by INR 2,000/t w-o-w, according to BigMint's latest assessment. In Delhi-NCR, ADC12 spot prices were assessed at INR 210,000/t ex-Delhi, aligning with domestic tense scrap prices, which settled at INR 177,000/t ex-Delhi.

Copper

Imported: BigMint's assessment of US-origin talk scrap was at $4,900/t, a 4.5% w-o-w rise, Middle East-origin (UAE) prices were recorded at $4,600/t, up by 2.9% w-o-w. Copper motor mix scrap prices are being offered at $1,190-1,200/t by sellers based in the EU and the US. However, these prices seem to be higher than the bids currently being placed.

Although BigMint noted traded levels concluding at $1,160-1,170/t. China's buying inquiries for motors and specific grades like Millberry, Candy berry, Cloves, and Birch Cliff have increased from Australia after months of slow activity.

Domestic: Domestic copper armature prices were assessed at INR 736,000/t ($8,770/t) exy-Delhi, w-o-w. Copper futures on the LME recently hit a 4-month low, falling to $8,750/t. However, prices have since rebounded to $9,240/t, reaching levels seen in July.

Prices of secondary continuous casting rods (CCR) (99%) were at INR 786,000/t ($9,367/t) ex-Delhi, slightly up by 0.12% w-o-w. Meanwhile, primary CCR were observed at INR 840,000/t ($10,013/t), up by 2.4% w-o-w. Imported scrap prices have increased by up to 2.6% w-o-w.

Zinc, lead

Domestic: India's domestic zinc prices increased by INR 4,000/t ($48/t) w-o-w. Lead prices increased by INR 1,000 w-o-w as compared to 23 August, 2024. Zinc prices were at INR 275,000/t w-o-w, aligning with INR 1,200/t rise in HZL prices and Lead prices remained stable compared to 23 August. Domestic remelted lead was priced at INR 186,000/t, ex-Delhi. Middle East zinc diecast prices stood at $2,120/t CFR Mundra.

China base metals market overview

In the week ending 31 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 9.2% w-o-w to reach 25,851 t, according to the exchange's weekly stocks report.

India's recycled metal content mandate

The Indian Ministry of Environment, Forest and Climate Change has introduced a new roadmap to reduce reliance on primary resources and minimise the environmental impact of mining.

Starting from FY'28, all new products made from non-ferrous metals will have to include a minimum of 5% recycled content. For aluminum, the recycled content must be 10%, for copper 20%, while for zinc it is 25%. Starting in 2025, producers of non-ferrous metals will be required to meet annual recycling targets, which will increase over time. By 2032, 75% of non-ferrous metals production should come from recycled materials.