- Exchange rate volatility dampens buying sentiment
- Monsoon slows industrial activity, scrap generation
India’s imported aluminium scrap prices inched up by $10-15/tonne (t) w-o-w, following a slight uptrend in London Metal Exchange (LME) prices. Overall scrap trade remained very slow during the week, weighed down by exchange rate hikes and heightened market uncertainty. Buying interest stayed muted, though participants expect some pick-up in demand ahead of the upcoming festive season.
Price assessments
BigMint assessed Tense scrap from the US at $1,960/t, largely stable w-o-w, while US Taint Tabor HRB (2-3%) saw a gain of $15/t, settling at $2,160/t. Both Extrusion 6063 and Tense scrap from the Middle East witnessed a slight gain of $5/t w-o-w. Meanwhile, Zorba 95/5 from the UK witnessed a reduction of $5/t w-o-w.
LME prices inch up w-o-w despite inventory inflows
At the time of reporting, LME aluminium prices stood at $2,613/t, slightly up by $5/t w-o-w as compared to $2,608/t last week.
Meanwhile, aluminium inventories at registered warehouses posted a slight gain of 2,975 t to 481,050t from 478,725 t in the previous week.
Market insights
Aluminium scrap buying remained limited during the week, with cautious sentiment prevailing across regions. The recent spike in the USD-INR exchange rate further slowed trade, adding to market uncertainty. Overall, activity stayed subdued, with buyers remaining hesitant despite expectations of improved demand in the coming weeks.
On the other hand, domestic Tense scrap prices remained stable w-o-w, with ex-Delhi at INR 196,000/t and ex-Chennai at INR 199,000/t amid improved scrap availability.
A market participant noted that scrap generation and trader uptake are expected to remain healthy, supported by the anticipation of a demand recovery as the market eyes a possible GST reduction, which could boost finished goods demand.
In northern India, heavy rainfall further weighed on overall market activity, keeping trade volumes subdued. Domestic Taint Tabor was assessed at INR 196,000-197,000/t, while Extrusion 6063 hovered in the range of INR 213,000-215,000/t ex-Delhi.
A Ludhiana-based source highlighted that monsoon-related challenges slowed industrial activity, leading to a decline in scrap generation, which was previously at healthy levels.
In the semi-finished segment, ADC12 prices stayed range-bound across both northern and southern regions, with market sentiment supported by steady demand and improved scrap availability.
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 remained largely stable w-o-w at $1,360/t CFR Mundra.
Outlook
Looking ahead, aluminium scrap prices in India are expected to stay range-bound in the near term as exchange rate volatility and weak buying sentiment continue to weigh on trade. However, demand could gradually improve with the onset of the festive season, alongside expectations of a possible GST reduction that may support downstream consumption.
Leave a Reply