The Indian market for imported aluminium scrap has experienced a significant upturn in prices, driven by a surge in futures, heightened demand, increased freight rates, and limited material availability in the western part of the country. Prices for all grades of aluminium scrap have witnessed a notable week-on-week increase of $60-70 per tonne.
As per reports, the tense scrap of Middle Eastern origin has risen by $60 per tonne to reach $1,720 per tonne. Meanwhile, scrap prices from the US have also increased by $35 per tonne to $1,775 per tonne week-on-week. Insiders in the market attribute the elevated freight rates to the conflict in the Red Sea, which has notably contributed to the surge in scrap prices, particularly in western India. Additionally, there are reported discrepancies in the bid-offer dynamics for specific scrap grades.
A reliable source has pointed out that the ongoing winter season has resulted in a slowdown in regular procurement and dispatches by UK and US sellers. This has caused bottlenecks in the recycling process due to a shortage of materials. A recent transaction involved the sale of approximately 250 tonnes of Europe-origin aluminium Zorba 95-5 scrap at a rate of $2,030 per tonne. Notably, the deal featured immediate loading, deviating from the usual shipment period, and garnered higher realizations from CIF WC India. While this information comes from a credible source, it is yet to be officially confirmed by the seller.
Meanwhile, gaining insights into the Middle East market has proven challenging as sellers respond to increased bids by raising prices. Talk scrap originating from the Middle East and the USA has experienced an uptick of up to $180 per tonne. This surge can be attributed to the recent escalation in three-month LME cash prices for copper, which currently stands at $8,577 per tonne.
As for aluminium, its three-month futures are currently at $2,260 per ton, marking an increase of $87 per tonne week-on-week. Additionally, the aluminium inventories in LME warehouses concluded at 542,750 tonnes. In the local market, a shortage of raw materials, notably Tense scrap, has led to elevated prices. Tense scrap is priced at INR 163,000 per ton, and utensil scrap is at INR 167,000 per tonne ex-Delhi (excluding GST).
Maruti Suzuki India Limited (MSIL) recently declared its monthly settlement price for ADC12, revealing a hike of INR 8,500 per tonne, bringing it to INR 199,500 per tonne for February 2024. However, the market is yet to absorb this price adjustment.
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