India has seen a notable decline in imported aluminium scrap prices w-o-w, attributed to decreased LME aluminium prices. Prices for all grades have fallen by up to 4 per cent this week, leading to market uncertainty and a cautious approach among market participants.
Meanwhile, three-month LME aluminium prices were at $2,225 per tonne, down 4 per cent w-o-w. Stocks at LME-registered warehouses stood at 940,125 tonnes. Aluminium prices are still hovering at three-month lows. Additionally, amid the European holidays, bid-offer disparity has emerged in the market.
Market uncertainty, lack of firm offers
A seller source stated: “Prices of all major aluminium scraps have declined. Plant owners are facing challenges with finished materials and a lack of orders, making it difficult to sell in the current market scenario. Despite lower prices, raw material availability remains limited, particularly for Tense and Taint tabor”.
A trader source said, “Yard owners, despite having stocks, are unwilling to offer materials until the LME price returns to $2,300/t, resulting in a shortage of supply. Negotiations for UK wheels destined for Chennai and Mundra are ongoing, with premiums up by $50/t on the LME price. Availability of wheel material remains limited”.
According to BigMint’s assessment, Tense scrap from the Middle East, particularly the UAE, decreased by $60 per tonne, settling at $1,730 per tonne. Zorba 95/5 from the UK also decreased by $25/t to $1,975 per tonne CFR West Coast, India. Firm offers are scarce, and buyers and suppliers show little interest in transactions. The market lacks clarity, with some suppliers quoting excessively high prices while bids are significantly $80-$100/t lower than anticipated.
Wheels scrap
Wheel scrap originating from the UK has witnessed very low bids, the bid levels are almost at LME (-$100 per tonne) standing at $2,160-2,180 per tonne, CFR Mundra. However, the offers are heard at $2,260-$2,270 per tonne levels. However USA Wheel sold at 2250 per tonne, CFR Mundra recently.
A source said, “Market participants expect volatility in LME aluminium prices, increasing pressure on imported scrap prices. This is compounded by the onset of the monsoon season in various parts of India, which could further disrupt trade”.According to the latest data from the International Aluminium Institute (IAI), global alumina production in June ’24 fell slightly by around 1 per cent, reaching 11.92 mnt compared with 12.08 mnt in May.
China’s silicon market
China’s silicon 553 prices have dropped $50 per tonne, reaching $1,790 per tonne CFR Mundra amid easing freight rates. However, buying interest has stayed low because major aluminium alloy manufacturers have sufficient silicon supplies. Additionally, the freight rate from China to Mundra was heard at $2,540-$2,560 per 20-foot container.
Domestic scrap market
In the domestic market, tense scrap prices have decreased by INR 2,000 per tonne in both Delhi and Chennai. According to BigMint’s assessment, domestic tense scrap prices are now at INR 175,000 per tonne ex-Delhi NCR and INR 175,500 per tonne ex-Chennai. This decline aligns with the falling LME aluminium prices and sluggish market trends.
Outlook
Looking ahead, imported scrap prices are anticipated to drop further amid uncertainties in LME aluminium pricing. Buying activity is also expected to remain at lower levels. However, prices may turn positive once the European market reopens from the holidays.
Edited By: AlCircle Team
31/7/24
