Base metals prices on the London Metal Exchange (LME) showed positive trends this week after fluctuating and trending lower over the past few weeks, However, aluminium was one exception that witnessed a negative price trend.
Notably, LME remained closed for two consecutive days on 2-3 June 2022 on account of bank holidays.
Aluminium
SteelMint’s assessment for domestic aluminium tense scrap stood at INR 164,000/t ($2,113/t) exy-Delhi yesterday, stable w-o-w. LME aluminium cash prices were down by $128/t to $2,701/t w-o-w. Meanwhile, ADC12 alloy ingot prices stood at INR 205,000/t ($2,641/t) exw-Faridabad, down INR 4,000/t ($52/t) on a w-o-w basis.
Import prices of aluminium
Aluminium import prices (tense and extrusion) of Middle East origin have decreased by up to $50/t, while aluminium talk scrap prices increased by $200/t on week CFR Nhava Sheva. UK-origin aluminium (Zorba) increased by $40/t, while wheel scrap decreased by $50/t CFR Nhava Sheva w-o-w on 31 May.
However, there was offer-bid mismatch for overseas scrap by as much as $100-120/t depending upon origin and some buyers restrained their bids as previous shipments arrived at ports in western India when LME prices were at peak levels of $4,000/t.
Some traders floated reasonable high-seas offers and are forced to release the off-load containers to prevent slab-wise demurrage charges, trader sources shared.
Notably, aluminium stocks fell by around 27,775 t to 453,875 t w-o-w on 1-June at LME-registered warehouses.
Nickel three-month contract prices rise
The LME nickel three-month contract prices rose 5% to $28,119/t on 1 June as against $26,788/t on 25 May.
LME nickel cash prices rose 4% w-o-w to $27,710/t whereas stocks slipped throughout the week, falling by 1,128 t w-o-w to 71,472 t yesterday. SteelMint’s assessment for stainless-steel grade 304 scrap was at INR 152,000/t ($1,958/t), down INR 3,000/t ($39/t), while grade 316 scrap is assessed at INR 255,000/t ($3,285/t) exy-Delhi, stable w-o-w.
The government’s imposition of 15% export duty on stainless steel finished products hurt the scrap market. Buyers at major mills adopted a wait-and-watch stance awaiting further price correction, SteelMint learnt from sources.
Copper cash prices rise
LME copper cash prices showed an upward trend, rising 2% to $9,455/t on the last trading day of the week. On the other hand, the three-month contract showed an uptrend by 1% to $9,500/t on 1 June followed by a positive trend in the domestic market. SteelMint’s assessment for copper armature scrap stood at INR 727,000/t ($9,367/t) exy-Delhi yesterday, up INR 5,000/t ($64/t) w-o-w.
LME, domestic zinc prices trend higher
LME zinc prices, both cash and three-month contract, trended higher this week, rising 4%. SteelMint’s assessment for special high grade (SHG) zinc ingots rose INR 15,000/t to INR 345,000/t ($4,445/t) exw-Delhi on 3 June w-o-w. The domestic market witnessed a good number of buying inquiries that pushed prices higher.
Exchange prices play an important role in deriving domestic market prices and positive sentiments in both exchanges – LME and MCX – kept domestic prices supported. It was observed that zinc ingot prices increased on both exchanges by 2-4%.
On the Multi Commodity Exchange (MCX), zinc ingots traded at INR 335,850/t ($4,327/t), a w-o-w increase of 1.6% as against INR 330,400/t ($4,257/t) on 27 May.
Moreover, Hindustan Zinc Ltd. (HZL) increased special high-grade (SHG) zinc ingot prices recently.
Global market scenario
Arconic Corporation, headquartered in Pittsburgh, Pennsylvania, is a leading producer of aluminum sheet, plate and extrusions. The company recently announced that it will be pursuing the sale of its Russian operations gradually after limitations imposed on the company’s operations by the Russian government as a result of the ongoing legal dispute with the Russian Federal Anti-Monopoly Service.
Following this review, the company has determined, with the support of the board of directors, to pursue a sale of the facility in Samara, Russia, in strict compliance with all applicable laws. As a result, the company expects to record a charge of up to $500 million.
In developing and developed countries lay-offs had taken place under specific industries over the last couple of weeks and amid low housing segment sales along with high inflation purchasing power remained limited.
The automobile sector witnessed supply-chain disruption due to semiconductor shortage and China’s lockdown affected auto consumption. This impacted demand for non-ferrous metals and Indian exporters were affected as a result.
However, China’s stimulus package is supposed to lift market sentiments and some tweaks in passenger vehicle taxation could boost sales volumes in the next quarter, SteelMint understands.
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