India: Imported aluminium scrap prices soften w-o-w amid weak LME, festive lull

• Aluminium scrap prices fell on weak LME cues
  
  
• Domestic Tense scrap prices remained largely unchanged
  
  

India's imported aluminium scrap prices declined by $30-40/t w-o-w, primarily due to a downward trend in London Metal Exchange (LME) prices. Despite strong demand and ongoing supply constraints, prices continued to fall as subdued trading activity during the festive week limited any significant gains.

Price assessments

BigMint assessed Tense scrap from the US at $2,000/t, down by $40/t w-o-w, while US taint tabor HRB (2-3%) saw a drop of $10/t settling at $2,175/t. Meanwhile, Zorba 95/5 witnessed a slight gain of $20/t w-o-w and extrusion from the UAE witnessed a reduction of $30/t w-o-w.

LME prices down w-o-w amid inventory inflows

At the time of reporting, LME aluminium prices stood at $2,572/t, down by $35/t w-o-w as compared to $2,607/t last week.

Meanwhile, aluminium inventories at registered warehouses increased by 1%, rising to 479,525 t from 477,100 t the previous week, adding further pressure on LME prices.

Market insights

Aluminium scrap prices underwent a correction during the week, but the decline was not as steep as buyers had anticipated. Supplier offer levels remained firm, and bid-offer discrepancies were observed across certain grades.

Scrap grades originating from the UAE remained firm, supported by strong domestic market sentiment and a prevailing scrap shortage within the country. This shortage also kept export offers to India at elevated levels. Demand for UAE-origin Tense scrap remained strong, driven primarily by limited scrap arrivals from the US.

According to market participants in the UAE, a significant portion of domestic scrap has been exported to India due to robust demand. Indian buyers, particularly those based in the western region, have increased imports from the UAE, benefiting from shorter transit times and reliable supply.

On the other hand, domestic Tense scrap prices were stable w-o-w, with ex-Delhi at INR 197,000/t and ex-Chennai at INR 200,000/t, backed by consistent demand and tight availability.

In the semi-finished segment, ADC12 prices remain firm across both northern and southern regions, supported by strong domestic and imported scrap prices. Ongoing raw material shortages are likely to add further pressure, driving prices higher across regions.

BigMint's monthly assessment for the OEM grade of ADC12 stood at INR 230,000/t in Delhi and INR 232,000/t in Chennai.

Silicon price trends

According to BigMint's assessment, silicon 553 prices from China inched down by $5/t w-o-w to $1,365/t CFR Mundra.

In the coming weeks, prices are likely to move higher as sellers hold back or resist sales in anticipation of better returns. The rise in raw material costs, coupled with limited silicon metal production and several factories remaining offline, is adding upward pressure to the market.

However, once production returns to full capacity and more factories resume operations, prices may ease slightly and stabilize at more balanced levels. This outlook reflects the feedback and sentiment gathered from multiple suppliers.

Outlook

Aluminium scrap prices are expected to remain rangebound, supported by tight supply and steady domestic demand. In the semi-finished segment, ADC12 prices are also likely to stay stable, with no significant decline anticipated, as upcoming festive demand is expected to sustain market strength.