- Imported scrap offers remain high, buyers cautious
- Domestic casting-grade scrap softens on better supply
India’s imported aluminium scrap prices showed positive trends w-o-w, following positive movements on London Metal Exchange (LME). BigMint assessed UAE-origin Tense scrap at $1,955/tonne (t), up by $10/t w-o-w, while UK-origin Taint Tabor C/S (9-10%) stood at $2,020/t, up by $5/t w-o-w.
UK-origin Zorba 95/5 stood at $2,265/t w-o-w, up by $85/t, while UAE Extrusion 6063 inched up by $40/t to 2,665/t w-o-w. Meanwhile, UK-origin Wheel increased by $45/t to $2,680/t w-o-w.
LME prices increase w-o-w; inventories gain
At closing on 3 November, LME aluminium prices stood at $2,907/t, up by around $46/t as compared to $2,861/t last week.
Aluminium prices rose amid tightening global supply, driven by Century Aluminium’s production cut in Iceland following equipment failure. Concerns grew that China could exceed its 45 mnt output cap, while Beijing’s move to slow industrial capacity growth reinforced expectations of limited supply.
Meanwhile, Japan’s port stocks rose slightly, and China’s aluminium imports jumped 35.4% y-o-y, signalling strong demand. Alcoa’s Kwinana refinery closure and growing aluminium usage in data centre construction have strengthened prospects of a long-term price uptrend.
Meanwhile, aluminium inventories at registered warehouses increased significantly by 88,925 t to 554,575 t from 465,650 t in the previous week, indicating tightening supply conditions.
Market scenario
Imported aluminium scrap prices have firmed up in recent days, tracking the uptrend in LME aluminium, which rose amid tightening global supply and improving market sentiment. The firm LME trend, supported by supply disruptions and bullish sentiment in the global aluminium market, has pushed up imported scrap offers.
However, traders and secondary smelters report that most offers across key imported grades remain elevated and currently unworkable for buyers. As a result, overall buying activity remains muted, with market participants adopting a cautious “wait-and-watch” approach in anticipation of a possible price correction.
Some selective buying interest has been noted for Zorba, depending on price levels and delivery terms, while most buyers continue to refrain from fresh bookings until market conditions stabilise. Freight costs and currency fluctuations are also being closely monitored, as they could influence import viability in the coming weeks.
On the domestic front, casting-grade scrap prices have softened due to improved material availability and limited procurement during the festive period. This has widened the price gap between domestic and imported scrap, prompting several smelters to opt for local sourcing. However, Tense scrap prices are expected to recover in the near term, supported by a seasonal increase in ADC12 demand from the automotive sector.
India’s aluminium ADC12 market rebounded in October after a modest decline in September, with prices supported by rising automotive sector demand following GST cuts. While global scrap prices surged on higher LME levels, domestic tags corrected due to improved availability.
According to BigMint, average OEM ADC12 prices for October increased m-o-m, reaching INR 231,000/t in Delhi and Pune, up by INR 2,500/t and INR 3,000/t respectively, and INR 232,000/t in Chennai, up by INR 1,500/t. The scrap-to-semi-finished spread widened to INR 39,000-43,000/t, reflecting higher ADC12 costs amid declining domestic scrap prices.
Outlook
Imported aluminium scrap prices in India are likely to remain firm in the near term, supported by elevated LME benchmarks and strong global demand. However, high offer levels may continue to limit active buying, keeping market sentiment cautious.
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