- Imported aluminium scrap prices down $15-25/t
- 3-month LME aluminium prices witness slight decline
India’s imported aluminium scrap prices have witnessed a downward correction this week amid marginal drop in LME aluminium prices due to weak buying interest amid approaching monsoons which has dampened market activity.
The 3-month LME aluminium prices were recorded at $2,520/t, slight fall of $25/t w-o-w.
According to BigMint’s assessment, tense scrap originating from the Middle East, particularly the UAE, dropped $20/t to settle at $1,780/t and zorba 95/5 from the UK fell by $25/t to $2,055/t CFR west coast, India.
Meanwhile, a few grades like US tense 6-7% recorded a drop of up to $15/t w-o-w, moving down to $1,835/t and $1,780/t CFR west coast.
Low buying interest
A source stated, “In India, purchasing interest for scrap is projected to stay low, with a potential rise expected after July. Alloy producers seem to have sufficient scrap stocks to fulfill orders for the next one to two months.”
The source further shared that “buyers are currently not interested in booking imported ingots as local market offers are cheaper. Ingot sales have softened significantly in a reflection of market weakness”.
Additionally, there are cash flow issues, with payment periods extending from the usual 30 credit days to 45-50 days. Sellers are now asking buyers to place offers, indicating a shift towards a buyer’s market.
Rise in ADC12 ingot imports
Indian automobile die casters have increased imports of ADC12 ingots, which recorded a rise of ~80% m-o-m in May reaching 6,500 t compared to the previous month’s 3,700 t. Meanwhile, other grades such as A356, LM6, LM24 and LM25 accounted for the remaining 32,200 t.
China’s silicon market
According to BigMint, prices of China’s silicon 553 have stayed rangebound at $1,990/t CFR Mundra. Purchasing interest has stayed low because major aluminium alloy manufacturers have sufficient silicon supplies, leading to reduced market activity.
Domestic scrap market
In the domestic market, tense scrap prices have been rangebound in both Delhi and Chennai. BigMint’s assessment shows domestic tense scrap prices (ex-Delhi NCR) at INR 181,000/t and INR 182,000/t ex-Chennai.
Domestic buyers are expecting scrap prices to decrease, despite a slight increase in settlement prices for ADC12 by India’s largest automobile manufacturer for July.
- Aluminium wheels (UK origin) were traded at $2,375/t CIF Mundra
- Middle East wheels are available at $2,400/t
- Shredded TT 2% from the UK was traded at $2,060/t CFR Mundra
Outlook
In the near-term, imported scrap prices are expected to witness a minor correction due to subdued demand. Globally, uncertainty revolves around LME aluminium prices, which have dropped to $2,500/t after peaking to a two-year high of $2,750/t in the beginning of May.
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