Imported aluminium scrap prices into India witnessed fluctuations in the past week in tandem with the constant volatility in exchange futures along with divergent offers from trade participants.
There were substantial gaps between most bids and offers, at times as much as $50-60/tonne (t) in specific grades ahead of the approaching Christmas and New Year holidays.
The three-month aluminium futures and spot prices on the London Metal Exchange (LME) drifted down by up to $100/t w-o-w. Stocks stood at 479,525 t in yesterday’s closing, down by 16,900 t on a weekly basis.
A couple of UAE-based exporters said that they are looking to clich deals at bids of $2,200-2,210/t for extrusion or 6063 scraps clean briquette in 20ft container with 23-24t loading material and foresee positive futures, ie, the LME three-month contract prices.
Further, an indentor said he may be able to crack deals at more than $2,200/t from the seller’s end, considering strengthening LME futures today but buyers are a bit hesitant to place their bids amid minor price contractions in the Indian domestic market.
A couple of factors that should be looked at from the buyers’ perspective include shipment details of cargo that will get loaded after the Christmas festival. Another factor is the depreciating currency which is hovering close to INR 83 against the US dollar (USD) which will also raise the landing cost by INR 0.5-1 per kg.
SteelMint’s price assessment states the data from normalization to rationalization submitted by different channels resulted in $2,180-2,200/t for extrusion clean briquette, CNF Nhava Sheva/Mundra through the Middle East region.
Current indicative offers for aluminium scrap tense from the Middle East, particularly the UAE, hovers at $1,740-1,760/t, marginally down by $20/t w-o-w.
Meanwhile, offers of Zorba 95-5 or 94-4 from the UK hovered at $1,900-1,920/t with a marginal improvement of $20/t w-o-w.
Global market sentiments
The market observed limited activities and sporadic contracts have been concluded from the Middle East because a few sellers and buyers are on scheduled festive leave. However, some buyers are active in the market, but due to the huge disparity between bids and offers of around $60-70/t they are resisting booking any slots.
Furthermore, the market is being challenged by the currency’s continuous depreciation, which is raising the cost of materials. Prominent buyers have limited their usual activities and opted for a wait-and-watch approach until the first or second week of January.
According to sources, a few scrap shredders in the UK have already gone into maintenance, while others plan to do so until the second week of January 2023.
In addition, offers for China-origin silicon 553 grade hover at around $2,520–2,540/t down by $20/t w-o-w, CFR Mundra.
Outlook
Both the buyer and seller sides have mixed feelings, and if this trend continues, prices may experience a minor correction in the near term.
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