India’s aluminium scrap imports maintain the upward trajectory, rising by 5% M-o-M in April’24

AL Circle

In April 2024, India's imports of aluminium scrap continued their upward trajectory, growing by 5 per cent from the previous month, according to provisional data from BigMint. This followed a notable 18 per cent surge in March. However, compared to last year's corresponding period, import volumes declined marginally by 4 per cent. 

India’s aluminium scrap imports maintain the upward trajectory, rising by 5% M-o-M in April’24

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April 2024 witnessed a total import of 135,816 tonnes of aluminium scrap, reflecting a modest improvement from the preceding month's 128,861 tonnes. Nevertheless, this figure fell short of April 2023's import volume of 141,894 tonnes.

Market dynamics

Despite the slight uptick in aluminium scrap arrivals in India during March and April, the volumes remained subdued compared to last year's corresponding period (CPLY). The primary factor behind this deceleration in import growth stems from the persistent challenges in the Red Sea region, which emerged around December 2023. 

Since then, imports have faced a significant downturn. This disruption in the supply chain has resulted in a scarcity of scrap in the domestic market, notably impacting aluminium alloy manufacturers reliant on grades such as Tense, Zorba, Taint Tabor, Troma, and Trump. Consequently, numerous buyers have shifted their preference towards purchasing from the domestic market. This inclination has resulted in a notable depletion of inventories, consequently driving prices for domestic and imported materials upwards.

Nevertheless, examining the present market dynamics, there has been a discernible improvement in scrap availability, primarily attributed to the arrival of imported scrap consignments booked during January-February. This influx has slightly alleviated the scrap supply constraints in the domestic market. However, the full impact of this trend on pricing in the upcoming months remains to be seen.

Price trends

Despite the marginal uptick in supply, domestic and imported materials prices remained elevated. As per BigMint's evaluation, tense mix scrap (8-9 per cent) sourced from the UAE commanded a price of $1,941 per tonne, indicating an approximately 6 per cent surge in April compared to the average price of $1,825 per tonne CFR Mundra. Similarly, a parallel trend was noted in the domestic market, with tense scrap reaching INR 186,086 per tonne, reflecting a 5% month-on-month increase from INR 177,263 per tonne ex-works Delhi.

In April 2024, the London Metal Exchange (LME) saw a significant surge in aluminium prices, reaching $2,534 per tonne, marking a 1.3-year peak and a 12 per cent month-on-month increase from the preceding month's average of $2,271 per tonne. Concurrently, stocks experienced a notable decline of 10% month-on-month, dropping to 515,908 tonnes from 571,264 tonnes in March 2024. The upswing in aluminium prices was primarily attributed to supply concerns from sanctions imposed on Russian metals.

The United States and the United Kingdom implemented measures barring the LME and CME from accepting new Russian aluminium, copper, and nickel into warehouses. Additionally, investor requests to withdraw metal from LME-registered warehouses further diminished available aluminium stocks. This move aimed to restrict Russian revenue from metal exports amidst the ongoing conflict in Ukraine. These combined factors exerted additional upward pressure on imported scrap pricing in April 2024.

sourced from SteelMint under the content exchange agreement 

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