India’s domestic aluminium scrap offers increased slightly on strengthening prices on the London Metal Exchange (LME) and market participants accepted the higher overseas offers on an expected uptrend in the near term. Most of the trade participants expect LME prices to reach $3,400-3,500/tonne (t) amid tight supply due to global geo-political tensions between Russia and Ukraine.
Russia and Eastern Europe are key aluminium producers and contribute about 6.3% of the world’s total primary aluminium production. On the other hand, China’s estimated share is around 56% as per IAI.
Current aluminium scrap offers of Middle East (Dubai) origin for extrusion clean briquetted were at $2,820-2,840/t, taint tabor (TT) clean briquetted at $2,410-2,430/t, tense, 4-5% attachment at $1,960-1,970/t and wheels at $3,100-3,120/t, on CIF NhavaSheva basis.
Whereas, US-origin TT 2-3% attachment offers hovered at $2,220-2,230/t and tense, of around 3% attachment at $2,050-2,060/t, on CIF NhavaSheva basis. However, a few specific offers were on an immediate shipment basis.
Indian aluminium scrap importers are concerned about the volatile currency which has been impacting the landing cost as small tonnage importers avoid hedging charges and prefer to pay on the spot after the consignment’s arrival.
Falling of stocks at LME registered warehouses and global primary aluminium production fell from 4.5% to 5.5 mn t,y-o-y in Jan’22 as per IAI data against 5.77 mn t in Jan’21.
Further, domestic scrap offers inched up in line with overseas scrap offers. The tense grade was assessed at INR 167,000/t, utensils at INR 196,000/t, extrusion at INR 203,000/t and TT at INR 180,000-182,000/t exw-Delhi, excluding GST.
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