- Buyers hesitate amid uncertain LME price direction
- Scrap trading remains selective rather than free-flowing
India’s imported aluminium scrap prices increased w-o-w, tracking the rise in LME aluminium prices.
According to BigMint’s latest assessment for CFR Nhava Sheva deliveries, US-origin taint tabor HRB 2-3% scrap prices increased by $75/t w-o-w to $2,775/t, from $2,700/t, while UK-origin wheel scrap prices rose by $80/t to $3,375/t.
LME aluminium gains as inventories decline further
Three-month aluminium prices on the London Metal Exchange (LME) increased w-o-w, closing at $3,380/t on 11 August, against $3,236.5/t on 4 August, up by $143.5/t, or 4.4% w-o-w.
Meanwhile, LME aluminium inventories declined by 6,000 t, or 2.3% w-o-w, to 254,900 t on 11 August from 260,900 t on 4 August.
LME aluminium prices remained firm in early August, supported by declining inventories, tighter prompt availability, and stronger sentiment across base metals. China’s production ceiling and supply disruptions provided additional support, while expectations of rising Indonesian supply and exports limited further upside.
Market scenario
The global imported aluminium scrap market remained mixed this week, with prices edging higher but trading cautiously. Rising LME aluminium prices and declining global inventories have improved sentiment, while tightening supply conditions across key exporting regions are providing underlying support. However, buyers remain hesitant, with market participants closely monitoring the extent of further LME gains before committing to fresh purchases. Trading is therefore not free flowing, as uncertainty over the direction of aluminium prices continues to limit buying interest.
Recent transactions indicate some price firmness across key grades. US-origin Tense Tabor Hammell 7-8% was sold at $2,680/t CFR Mundra, UK-origin Tense Tabor C/S 9-10% at $2,590/t CFR Mundra, UK-origin Wheels at $3,375/t CFR Nhava Sheva, and US-origin Tense Tabor HRB 2-3% at $2,770/t CFR Nhava Sheva. However, these trades remain selective rather than indicative of broad-based demand recovery.
Supply availability has tightened significantly across the Middle East, with aluminium scrap exports from the region largely disrupted. The UAE’s ongoing scrap export ban, tighter Saudi export regulations, Red Sea disruptions, and reported port congestion at Jeddah have restricted regional flows. The suspension of PSIC issuance for UAE-origin cargoes and the DGFT’s de-listing of several PSIC agencies have further complicated shipments, while weak local demand offers limited support.
Despite these supply constraints, demand for key grades such as Zorba and Tense remains subdued, keeping the market from rallying sharply. Overall, prices are finding support from restricted supply, but buyers remain cautious and are reluctant to chase higher levels without greater clarity on LME aluminium’s next move.
On the domestic front, aluminium scrap prices remained under pressure during the week, with casting-grade and extrusion scrap witnessing declines amid subdued buying activity, while most other scrap categories remained stable to firm. The sharpest correction was recorded in southern India, where casting-grade scrap prices declined significantly, while northern markets also eased due to cautious procurement by secondary alloy producers. Although imported aluminium scrap prices have started strengthening following the recent rise in LME aluminium prices, the uptrend has yet to be reflect in the domestic market. Market participants expect local scrap prices to firm over the next few days as higher import costs gradually filter through to domestic prices.
Chinese silicon prices
According to BigMint’s latest assessment, China-origin Silicon Metal 553 prices increased by $55/t w-o-w to $1,385/t CFR Mundra, from $1,330/t, supported by firmer market sentiment and higher aluminium prices despite subdued downstream buying interest.
Outlook
Imported aluminium scrap prices are likely to remain firm to range-bound in the near term, supported by tighter global supply and higher LME aluminium prices. However, cautious buying and limited downstream demand may cap further gains. Domestic scrap prices could gradually strengthen as higher import costs filter through, while any sustained LME rally could provide additional upside.
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