India: Imported aluminium scrap prices decline w-o-w on weaker LME cues

• Buying activity slows across scrap market
  
  
• Strong dollar pressures scrap procurement
  
  

India's imported aluminium scrap prices traded lower w-o-w, tracking softer trends in LME aluminium prices. According to BigMint's latest assessment for CFR Nhava Sheva deliveries, UK-origin zorba 95-5 scrap prices declined by $15/t w-o-w to $3,025/t from $3,040/t previously, reflecting subdued buying interest and weaker conditions in overseas scrap markets.

Meanwhile, US-origin tense 6-7% scrap decreased by $25/t w-o-w to $2,785/t from $2,810/t last week, amid cautious procurement activity and weaker sentiment in the imported aluminium scrap market.

LME aluminium eases w-o-w

Three-month aluminium prices on the London Metal Exchange (LME) traded lower w-o-w, closing at $3,604/t on 9 June against $3,716/t on 2 June, down by $112/t.

LME aluminium prices remained volatile during the week as profit-booking after the recent Middle East-driven rally and cautious physical buying pressured prices lower. However, persistent concerns over supply disruptions linked to Strait of Hormuz shipping risks and tighter nearby availability continued to limit sharper downside.

Market sentiment remained supported by continued declines in visible exchange inventories, reflecting ongoing tightness in prompt aluminium availability despite softer price trends during the week.

Meanwhile, LME aluminium inventories declined by 4,800 t w-o-w to 333,200 t from 338,000 t over the same period, indicating continued tightness in exchange warehouse stocks.

Market scenario

Imported aluminium scrap prices witnessed a marginal correction, tracking the decline in LME aluminium prices. However, the fall was less severe than many market participants had expected, as imported scrap offers remained elevated due to tight global scrap availability and constrained supply conditions.

Market sentiment remained cautious, with buying activity reported to be slow. Participants noted that the weak Indian rupee continues to increase import costs and is expected to strengthen them further, discouraging aggressive procurement despite the recent correction in aluminium prices.

Market participants indicated that aluminium scrap costs have remained elevated since the onset of the conflict, with no significant easing in recent weeks. While the latest decline in aluminium prices represents the first meaningful correction in a prolonged period, the market's near-term direction remains uncertain as scrap values continue to hold firm. Wheel scrap remains in short supply, supporting market prices.

Many participants believe the market would benefit from a period of consolidation following recent volatility rather than experiencing sharp price swings in either direction. On the domestic front, activity remained largely stable. Although some expected a correction of around INR 3-4/kg in response to weaker global prices, local markets have so far shown limited movement, highlighting the continued support from underlying supply-side fundamentals.

Chinese silicon prices

According to BigMint's latest assessment, China-origin silicon metal 553 prices remained stable w-o-w at $1,435/t CFR Mundra, supported by firm import offers, steady demand, and stable market sentiment.

Outlook

Imported aluminium scrap prices are expected to remain stable in the near term. While softer LME aluminium prices may continue to exert downward pressure, tight global scrap availability, firm import offers, and a strong US dollar are likely to limit any sharp correction. Domestic market activity is expected to remain cautious, with buyers closely monitoring global price movements, currency fluctuations, and geopolitical developments for clearer direction.