Aluminium stocks at LME warehouses ascended by 8% to 580,275 tonnes

Base metals prices on the London Metal Exchange (LME) generally trended positively for the week ending on February 23, except aluminium, which saw a decline of 1.7 per cent due to increasing stocks. Aluminium stocks at LME warehouses notably rose by over 8 per cent to 580,275 tonnes from 534,925 tonnes.

On the LME, three-month aluminium futures decreased to $2,180 per tonne, while nickel prices increased by 6.9 per cent to $17,495 per tonne. Copper prices rose to $8,567 per tonne, marking a 0.9 per cent increase; zinc gained 0.8 per cent to reach $2,405 per tonne, and lead prices saw a 1.5 per cent rise to $2,095 per tonne.

In India, there were minor fluctuations in imported and domestic aluminium scrap prices, while prices for P1020 on the primary market declined. Copper and zinc prices remained positive, while lead prices remained relatively stable.

Aluminium prices

During the week, spot prices for primary aluminium ingot (P1020) in the market saw a decline influenced by price reductions from major industry players. Conversely, spot prices for aluminium ADC12 alloy ingots in the automobile sector witnessed a weekly increase of INR 2,000 per tonne, reaching INR 204,000 per tonne.

The escalation of local tense scrap prices propelled this rise. India's prominent automobile manufacturer established March settlement prices for ADC12 at INR 207,400 per tonne, marking a substantial monthly surge of INR 7,900 per tonne, reaching the highest level in the past ten months.

Imported aluminium scrap market

In the Indian imported aluminium scrap market, there were mixed trends due to sellers hesitating on future bookings, citing elevated freight costs and concerns related to the Red Sea conflict. Negotiations encountered difficulties with bid-offer gaps ranging between $50-60 per tonne, with some cases reaching as high as $80-90 per tonne, leading to limited trade activities. Within the domestic sphere, a shortage of raw materials, particularly tense scrap, sustained upward pressure on prices. Tense scrap prices are currently at INR 172,500 per tonne ex-Delhi (excluding GST).

As reported by the International Copper Study Group (ICSG), global copper mine production saw a slight uptick of around 1 per cent, reaching 22.063 million tonnes in CY'23 compared to 21.950 million tonnes in the corresponding period of the previous year.

First Quantum Minerals finalized a deal with Jiangxi Copper, securing $500 million for the annual delivery of 50,000 tonnes of copper anodes from Zambia. Rio Tinto revealed an 11 per cent decline in full-year underlying earnings, attributed to reduced contributions from its aluminium business due to declining prices.

Copper

Copper prices experienced a notable weekly uptick in domestic markets, with armature scrap reaching INR 687,000 per tonne and secondary rods at INR 728,000 per tonne, ex-Delhi. This surge was fueled by demand for finished materials and the reopening of the Chinese market, driving prices higher this week.

Reflecting this trend, copper cathode prices on the MCX rose by 1 per cent week-on-week to INR 730,000 per tonne, compared to the previous week's INR 723,000 per tonne for the February contract, in line with the domestic market movement.

In the imported segment, copper prices in India saw a robust increase of 3.5 per cent week-on-week. Middle Eastern brass honey prices surged by $185 per tonne to $5,485 per tonne. Bid-offer disparities persisted due to a $300 per tonne increase in three-month LME contract prices at the time of assessment, leading to tentative bids from some sellers.

Meanwhile, on the COMEX, copper prices witnessed a solid weekly gain of 2 per cent, settling at $8,579 per tonne from the previous week's $8,425 per tonne. This increase aligns with the upward movement seen in imported copper market prices.

Zinc and Lead

Zinc prices in Delhi saw a modest increase of 1.2 per cent, attributed to a 2 per cent raise by HZL, though they continue to hover near 6-month lows. Meanwhile, re-melted lead ingot prices remained steady at INR 177,000 per tonne ex-Delhi.

In the imported market, zinc diecast (5 per cent) sourced from the Middle East rose by 1.3 per cent to $1,930 per tonne CFR Mundra, reflecting a 1.4 per cent weekly uptick in LME futures prices.

Received under the content exchange agreement with SteelMint