The Indian market for imported aluminum scrap is experiencing an upward price trend driven by an increased demand and shortages both domestically and internationally. Despite fluctuations in LME prices, the current rates have not been corrected, as sellers are reluctant to lower prices while buyers are willing to secure materials at premiums.
Based on BigMint’s assessment, extrusion scrap from the Middle East particularly UAE has risen by $5/t to $2,115/t, and zorba 95-5 UK scrap has increased by $50/t, reaching $2,010/t, CIF western coast India, w-o-w.
Notably, Middle East i:e; UAE and the US, trump scrap prices to India and the Far East are almost aligning amid the material availability concerns in the Indian market and somehow the recent bids have been improved to secure the appropriate consignments.
Further, raw materials in the transit phase have been concluded, preventing traders from short-selling in the market for a few specific grades like Zorba and Tense, and some bids were notified for Extrusion 95/5 from the US but the gap of $50-60/t restrained to get healthy transactions as 6063 95/5 tentative bids are $1,880-1,890/t, maximum $1,900/t CIF basis, but sellers expectations were higher by $50-60/t.
According to indentors, demand for aluminum scrap, particularly Zorba scrap, has improved compared to previous weeks, hinting at a positive near-term outlook.
However, medium-scale manufacturers face challenges in fully utilising their capacity due to transit time delays for imported material and material availability issues in the domestic market, an end-user told BigMint.
Sellers in the imported market cited higher freight costs and the Red Sea conflict as reasons for not actively engaging in future bookings. While there is demand, negotiations face challenges with a gap of $50-60/t in bid-offers, reaching $80-90/t in some cases, resulting in limited volume trades.
Talk scrap from the Middle East and the US has increased by up to $120/t. This rise was due to the recent hike in copper’s three-month LME cash prices. Currently, copper LME prices are hovering at $8,450/t.
The three-month futures for aluminium are at $2,183/t, down by $50/t w-o-w. Aluminium inventories in LME warehouses closed at 549,600 t.
China-origin silicon 553 prices are at around $2,030/t CIF Mundra, which remained stable post-holidays in China.
Domestic market
In the domestic market, tense scrap commands a premium over utensil scrap due to current shortages, with tense scrap prices at INR 172,000/t and utensil scrap at INR 168,000/t exy-Delhi (excluding GST).
Outlook
Considering the current market dynamics, it is expected that demand might continue to remain at supportive levels i:e; moderate to positive.
