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India: Imported aluminium scrap prices rise w-o-w amid LME uptrend

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Aluminium
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24 Sep 2024, 18:04 IST
India: Imported aluminium scrap prices rise w-o-w amid LME uptrend

Imported aluminium scrap prices in India drifted higher w-o-w by up to 2% amid a rise in LME aluminium prices following the Federal Reserve's rate cuts and China's new monetary stimulus and support for the property market. Meanwhile, transactional activities remained on the lower side for few grades due to significant bid-offer disparities seen in the market.

Meanwhile, the three-month LME aluminium prices hovered at $2,540-$2,550/tonne (t), up 1% w-o-w. Stocks at LME-registered warehouses stood at 805,525 t. According to LME data, aluminium prices are currently hovering at a 2-month high.

Higher prices, lower demand

A manufacturer said: "Aluminium scrap prices have increased w-o-w, primarily driven by the rebound in LME levels following the Federal Reserve's rate cuts. However, despite this rise, buying interest in the market for imported aluminium scrap remains subdued. Prices are currently higher than expected, leading most buyers to purchase only minimal quantities to sustain operations. Many mills, especially in the alloy segment, are operating at just 30-40% capacity. Additionally, with upcoming festivals and the year-end approaching, buyers are slowing down purchases to avoid excess inventory buildup."

Elevated inventories, locally reduced transactions

A seller said: "Domestic ingot producers are holding onto their raw material, which was acquired at higher prices, to avoid selling at a loss. As a result, inventory levels remain elevated. With the current high LME prices, sourcing raw material at lower costs has become difficult. To maintain liquidity, producers are engaging in fewer transactions."

BigMint's assessments

BigMint's benchmark assessments showed that tense from the UAE was priced at $1,830/t, up by 1.7% w-o-w, while zorba 95/5 from the UK was assessed at $2,090/t, both CFR West Coast, India.

Talk originating from the US was assessed at $5,080/t, while talk scrap from the Middle East was priced at $4,750/t, both up by up to 2.6% w-o-w, CFR West Coast, India, and offers from Columbia heard at 52.25% to CFR Chennai.

This week, BigMint's report indicates a $10/t rise in US taint tabor prices, bringing them to $1,990/t CFR on India's west coast. Suppliers are offering prices between $2,010 and $2,030/t, while bids remain around $1,920 to $1,930/t, highlighting a significant gap between bids and offers. The elevated offer prices are primarily due to a shortage of material in the market. This supply constraint, particularly from the US, has also driven up taint tabor prices in the UAE to $2,180/t.

China's silicon market

According to BigMint's assessment, prices of China's silicon 553 stood lower w-o-w at $1,670/t CFR Mundra. Meanwhile, offers from suppliers' side were at $1,720-1,730/t levels.

Global aluminium production remains stable in Aug'24: IAI

According to the latest data from the International Aluminium Institute (IAI), aluminium production in August, 2024 remained largely stable, edging down to 6.17 mnt as compared to 6.19 mnt in July.

Aluminium scrap imports decline m-o-m in Aug'24

In August 2024, aluminium scrap imports were recorded at 159,000 t, down by 7.3% m-o-m as against July's 171,600 t. Scrap imports have decreased due to weak market conditions, elevated inventories in the automobile sector, and competitive local raw material costs, all of which have contributed to the decline in imports.

Domestic scrap market

In the domestic market, tense scrap prices remain largely stable w-o-w 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.

Deals

Around 50t of US TT HRB bought at $1,990/t, CFR Mundra

Bought around 100t of UK C/S at $1,835/t, CFR Mundra

Sold around 100 t of Silicon 553 at $1,655/t, CFR Chennai

About 50t of Si 553 bought at 1670/t levels CFR Mundra

Around 20t of UK tense 5% bought at 1925/t levels, CFR Chennai.

Outlook

In the coming days, prices are likely to stay on the positive side, supported by the rising LME aluminium prices. Trading activity is expected to increase as the festive season approaches next month.

24 Sep 2024, 18:04 IST

 

 

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