- Tight scrap supply supports domestic prices
- LME aluminium crosses $2,600/t on demand optimism
India’s imported aluminium scrap prices increased by up to $40-50/t this week, influenced by strong global demand and ongoing supply constraints. Meanwhile, aluminium prices on the LME climbed above $2,600/t, supported by ongoing supply risks and optimism around sustained manufacturing demand.
Uncertainty over bauxite supply remains elevated due to disagreements between the Guinean government and Emirates Global Aluminium, threatening mining licenses in Guinea – one of the world’s top bauxite sources.
China’s aluminium output showed resilience, but demand signals were mixed. Japanese buyers settled Q3 premiums at $108/t, down 41% from the previous quarter and the lowest since early 2024. Despite this, combined inventories on the LME and SHFE remain 60% lower y-o-y, continuing to support prices amid tight visible stocks.
BigMint assessed Tense scrap from the US at $2,025/t, up by $35/t w-o-w, while Wheels from the UK stood at $2,580/t, up by $70/t w-o-w, both CFR west coast, India. At the time of reporting, London Metal Exchange (LME) aluminium prices stood at $2,609/t, up 1% w-o-w as compared to $2,588/t last week.
Market insights
Aluminium scrap offers remain elevated, while buyer bids are comparatively lower, reflecting a notable bid-offer disparity in the market.
Buyers are exercising caution and refraining from fresh purchases due to ongoing price volatility. A persistent shortage of imported scrap continues to support firm pricing, with domestic scrap prices also trending upward.
A market source noted, “Aluminium scrap imports from the US are currently unviable in the Indian market due to a strong domestic demand in the US.”
Bid-offer disparities in UK-origin Zorba are widening, with price gaps reaching up to $70, leading to limited availability of the material.
BigMint’s ADC12 (OEM approved) settlements for June were at INR 229,000/t in Delhi and at INR 231,000/t in Chennai.
The July settlement prices for ADC12 by a leading automaker have increased m-o-m, and this upward trend is expected to bolster domestic ADC12 prices in both the northern and southern markets. Ongoing raw material shortages are likely to add further pressure, driving prices higher across regions.
Silicon price trends
According to BigMint’s assessment, silicon 553 prices from China remained largely stable w-o-w at $1,190/t CFR Mundra.
Silicon metal prices in China have fallen by $200/t since May due to persistent over-production and rising inventories. Despite slowing solar demand, producers have not reduced output, worsening the supply-demand imbalance. Inventories are now estimated at 1.2-1.4 mnt, with no near-term signs of market recovery.
Outlook
Prices are likely to see modest gains amid continued supply shortages and ongoing geopolitical tensions. However, buying activity is expected to remain low to moderate, as market participants stay cautious due to prevailing uncertainties and the volatility in LME aluminium prices.
Leave a Reply