India’s aluminium imports drop to 8-month low in Nov’22

• Imports fall 10% on month in Nov
• Ore/concentrate imports plunge 70% m-o-m
• Scrap shipments rise slightly, US major supplier
• Output of domestic primary producers up 2% in Oct 

 India’s total aluminium imports stood at 359,386 tonnes (t) in November 2022 compared to 400,990 t in October, a drop of 10% m-o-m. This was the lowest import volume recorded in the last eight months, as per customs data.

Similarly, aluminium imports fell sharply by 44% y-o-y from 630,000 t in the corresponding month of last year.

Sub-commodity shipments

• Ore/concentrate imports dip: India imported around 144,720 t in the month under review as against 202,881 t in the previous month, a sharp fall of nearly 70%. Notably, November shipments dropped to a nine-month low.
• Scrap imports rise: Scrap imports by India rose by 5% in November to 156,572 t from 148,922 t the previous month.
• Finished product imports fall: Imports of finished aluminium products (both flats and longs) stood at 36,639 t in November compared to 39,380 t in October.

Scrap import highlights:

Supplier-wise trends

• US leading exporter: Indian buyers imported 49,508 t of scrap from the US in November, up 7% as against 46,276 t in October. Imports increased by 18% y-o-y from 42,015 t in November 2021.
• UK shipments largely stable: Imports from the United Kingdom remained largely unchanged at 15,806 t compared to 15,574 t in the previous month, as per SteelMint data. However, November 2021 imports had been recorded at 15,229 t, which shows that imports increased by 4% y-o-y.
• Imports from other geographies: The other prominent scrap exporting countries were United Arab Emirates and the Netherlands, which witnessed a sharp m-o-m hike in supplies to India in November, although volumes were small in actual terms. While the UAE exported a total of 8,827 t (up by 34%), the Netherlands imported 7,766 t, an increase of 38%.

Grade-wise imports: Zorba grade scrap imports were the highest in CY22 (till November) at 43,966 t, and a total of 463,988 t was traded in the January-November period. Taint Tabor shipments stood at 321,058 t in the 11-month period, whereas extrusion scrap imports were at 204,773 t. Moreover, tense scrap imports stood at around 193,924 t during the period.

Region-wise importers: Aluminum scrap was shipped the most to the northern region at 23,708 t, followed by 13,739 t in the southern region and 5,574 t in the western region.

Why imports declined?

• Global demand of aluminium has fallen over the month due to geopolitical events. China and Japan are the biggest export destinations, but due to weak demand, Indian aluminum mills are not getting the workable price level.
• Global scrap prices have gone up while finished products prices have not improved, resulting in lower imports.
• Price volatility for aluminium was very high in CY22, which led to uncertain market conditions and loss of trade.
• Most of secondary aluminium (produced via the scrap route) is utilised in the automobile segment. Weak automotive demand and poor sales have hindered scrap usage. Despite stagnant demand, however, SteelMint expects aluminium scrap demand to increase in the near future amidst cost-efficiency and the need for enhancing the share of recycled material in finished aluminium production amid the global decarbonisation drive.

Primary producers’ October output

Production by the primary producers in India increased slightly by 2% in October to 341,000 t from 334,000 t in September. Leading producer Vedanta produced 143,000 t in October as against 142,000 t in September, a marginal hike of 1%. Hindalco, on the other hand, recorded a total of 113,000 t of output, an increase of 4% in October as against 109,000 t in the previous month. Meanwhile, other producers like Balco and Nalco produced 47,000 t and 38,000 t, respectively, in October.

India, the second-largest producer of aluminum globally, recorded production of the base metal at nearly 4 mnt in 2021, and the secondary route roughly has a share of 1/3^rd of total production.

LME aluminum price trends

The London Metal Exchange (LME) recorded average aluminium three-months contract prices at $2,673.46/t in February-December 2022 (till the third week of December).

In the last one month, the Day Moving Average (DMA) of LME aluminium stock stood at 484,979 t, while three-months contract prices stood at $2,443/t. Aluminum stocks have decreased, while 3-months contract prices have risen slightly.