In April 2024, India’s aluminium scrap imports rose by 5% compared to the previous month, building on an 18% increase in March. However, imports were down by 4% compared to the same period last year, according to provisional data from BigMint.
In April 2024, India’s imports of aluminium scrap reached 135,816 tonnes (t), indicating a slight improvement compared to the previous month’s figure of 128,861 t. However, there was a slight decrease in the total import volume of aluminium compared to April 2023, which stood at 141,894 t.
Market insights
Despite the marginal improvement in aluminium scrap arrival in to India in March and April the volumes were on the lower side as compared to the corresponding period last year (CPLY). The primary reason for the the deceleration in import growth can be traced back to the ongoing challenges in the Red Sea that began around December 2023.
Since then, imports have experienced a considerable decline. This disruption in the supply chain has led to a shortage of scrap in the domestic market, particularly affecting aluminum alloy manufacturers who rely on grades such as tense, zorba, taint tabor, troma, and trump.
As a result, many buyers have started preferring to purchase from the domestic market. This preference had led to a significant decrease in inventories, causing prices to surge both in domestic and imported materials.
However, looking at the current market scenario, the scrap availability in the market has seen some improvement primarily due to the arrival of the imported scrap consignments that were booked in January-February period which slightly eased the supply of scrap in the domestic market. However, this trend will be reflected in the upcoming month’s pricing.
Imported, domestic price trends
Despite the slight improvement in supply, prices in the domestic as well as imported material remained on the higher side. According to BigMint’s assessment, tense mix scrap (8-9%) sourced from the UAE was priced at $1,941/t, marking a roughly 6% increase in April compared to the average price of $1,825/t CFR Mundra. Concurrently, a similar trend was observed in the domestic market, where tense scrap reached INR 186,086/t, showing a 5% m-o-m increase from INR 177,263/t ex-works Delhi.
LME aluminium price trend
In April 2024, LME aluminium prices surged to $2,534/t, marking a 1.3-year peak and a 12% m-o-m rise from the preceding month’s average of $2,271/t. Meanwhile, stocks witnessed a drop of 10% m-o-m to 515,908 t from 571,264 t in March 2024. The jump in aluminium prices were attributed to supply worries following sanctions on Russian metals.
Both the US and UK barred the LME and CME from accepting new Russian aluminium, copper, and nickel into warehouses. Investor requests to withdraw metal from LME-registered warehouses further reduced available aluminium stocks. The move aimed to curb Russian revenue from metal exports amidst the conflict in Ukraine.
These factors further put upward pressure on imported scrap pricing in April 2024.
Grade-wise, country-wise imports
Discussing the top grades imported, taint tabor led the way with 30,316 t, followed by zorba at 26,606 t, extrusion at 23,578 t, tense at 17,895 t, talk at 7,322 t, and other grades at 37,421 t.
In April, the northern region recorded the highest scrap imports, reaching 59,452 t, followed by the west with 48,607 t, the south with 20,566 t, and the east with 7,164 t.
In April 2024, country-wise imports showed a slight improvement, with the US being the largest supplier, followed by Saudi Arabia, the UK, and the UAE, contributing 29,356 t, 17,274 t, 14,018 t, and 9,437 t, respectively. Imports from other countries totalled up to 65,705 t.
Outlook
It is expected that the arrival of imported consignments might see further improvement in the upcoming month. However, in terms of prices the market anticipates to remain on the higher side potentially influenced by fluctuations in LME aluminium prices.