- Weak demand from alloy sector outweighs supply constraints
- Export curbs in UAE, EU may tighten supply from Sep’26
India’s imported aluminium scrap prices showed mixed trends w-o-w, tracking a decline in LME aluminium prices over the week.
According to BigMint’s latest assessment for CFR Nhava Sheva deliveries, US-origin tense 6-7% scrap prices increased by $30/t w-o-w to $2,460/t, while UK-origin taint tabor C/S 9-10% scrap prices declined by $5/t to $2,400/t.
LME aluminium eases amid declining stockpiles
Three-month aluminium prices on the London Metal Exchange (LME) traded lower w-o-w, closing at $3,143/t on 28 July against $3,177/t on 21 July, down by $34/t, or 1.1% w-o-w.
Meanwhile, LME aluminium inventories declined by 8,500 t, or 3.0% w-o-w, to 271,275 t on 27 July from 279,775 t on 20 July.
Market scenario
Aluminium scrap prices have remained under pressure despite shortages in certain grades, as weak demand from the secondary aluminium alloy sector continues to outweigh supply-side constraints. However, market dynamics could shift after September as potential supply disruptions begin to emerge.
The European Union is expected to implement restrictions on aluminium scrap exports, which could significantly impact India, as the EU-27 accounts for nearly 20% of the country’s aluminium scrap imports. Any reduction in shipments from the region is likely to tighten raw material availability and provide support to scrap prices.
In the Middle East, the UAE’s temporary four-month ban on aluminium scrap exports remains in place. Although the restriction was initially announced for four months, market participants expect exports to remain constrained until the government formally announces its withdrawal. In addition, industry sources indicate that Saudi Arabia is evaluating stricter controls on non-ferrous scrap exports, although no official policy has been announced.
Collectively, these developments point to a tighter global aluminium scrap supply outlook. If downstream demand recovers in the coming months, the combination of constrained supply and improving consumption could provide upward support to aluminium scrap prices.
On the domestic front, aluminium scrap prices witnessed a negative trend during the week, except for extrusion scrap, which remained firm. Casting-grade scrap prices in northern India declined amid subdued buying activity, while other scrap categories recorded gains on improved demand. Meanwhile, casting-grade scrap prices in southern India remained largely stable w-o-w.
Chinese silicon prices
According to BigMint’s latest assessment, China-origin Silicon Metal 553 prices declined by $20/t w-o-w to $1,330/t CFR Mundra from $1,350/t, amid softer Chinese export offers and subdued buying interest despite adequate supply availability.
Outlook
Aluminium scrap prices are expected to remain under pressure in the near term due to subdued demand from secondary alloy producers. However, potential EU export restrictions, the UAE’s ongoing export ban, and possible tighter controls in Saudi Arabia could tighten global scrap availability. If downstream demand improves, these supply-side constraints are likely to support aluminium scrap prices in the coming months.
Leave a Reply