India's imported aluminium scrap prices dropped by up to USD 75/tonne w-o-w following a decline in LME prices. However, buyers awaited further price corrections.
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BigMint's benchmark assessment for Tense scrap originating in the US was at USD 1,945/tonne (t), decreasing by USD 15/tonne w-o-w, while Wheels from the UK stood at USD 2,455/tonne, down by 3 per cent w-o-w, both CFR west coast, India.
This week, aluminium prices on the London Metal Exchange (LME) decreased by 2 per cent to USD 2,616/tonne from last week's USD 2,662/tonne. Meanwhile, stocks at LME-registered warehouses stood at 480,250 tonnes, down 3.5 per cent from 497,275 tonnes last week.
Domestic scrap prices rise w-o-w
In the domestic market, Tense scrap prices in both Delhi and Chennai inched up by INR 2,000/tonne as compared to last week. According to BigMint's assessment, domestic Tense scrap stood at INR 188,000/tonne ex-Delhi-NCR and INR 188,000/tonne ex-Chennai.
The domestic scrap market is facing challenges due to the delayed arrival of labourers after Holi, ongoing furnace maintenance, and billing issues. These factors are leading to uncertainty and a cautious sentiment among buyers ahead of fiscal year-end.
According to sources, "The aluminium scrap market is experiencing a bid-offer disparity, likely due to material shortages. Procurement is primarily focused on Tense and Zorba scraps, causing a cautious market outlook."
Additionally, plants in South India especially require Tense scrap, indicating regional demand shifts. However, there is a reluctance to procure extrusion scrap due to high offers, currently around INR 215,000/t, leading to limited availability in the market.
A trader source informed, "Demand for Taint Tabor and extrusion scrap remains robust, with buyers willing to pay a premium to secure material."
A major player in India is set to launch a new wire rod (CG grade) plant in two months, utilising P1020 ingots. This expansion is expected to drive an increase in the demand for aluminium within the country.
One of the major players has set the asking price for UBC scrap at INR 174,000/tonne for its new plant, with a one-week credit payment term. However, bids remain low and are not workable at the moment.
Recently, a deal for 50 tonnes of extrusion 6063 scrap was heard at INR 211,000/tonne ex-Delhi.
Chinese market updates
According to BigMint's assessment, prices of China's 553-grade silicon increased by USD 25/tonne w-o-w, reaching USD1,490/tonne CFR Mundra. Additionally, freight rates for a 20-ft container from China to Mundra were recorded at approximately USD1,400.
China's primary aluminium imports dropped by 11 per cent in February due to closed import arbitrage and higher domestic production. Imports from Indonesia and India fell by 72 per cent each. Russia became the largest source, with imports rising 50 per cent. Strong domestic production was driven by high-profit margins, aided by a sharp fall in alumina prices.
Outlook
Buyers anticipate further corrections in both imported and domestic scrap prices. As a result, market activity is expected to stay within a low to moderate range, with most participants engaging in need-based buying.
Note: This article was received under the content exchange agreement with BIGMINT and published as received without edits from AL Circle.
Image credit: Aluminium Machinery Solution Provider
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