The Indian scrap aluminium market is dampening due to a drop in futures contracts on the London Metal Exchange (LME) and low demand. Despite this, there have been moderate transactions in the Indian market, even with the recent increase in freight rates, as market participants try to maintain minimum stock levels and sustain operational activities.
SteelMint's projection shows that the tense scrap Middle East-origin price has decreased to US$1,640 per tonne, reflecting a decline of US$15 per tonne w-o-w. There has been a decrease of up to US$50 per tonne in the value of scrap talk from the USA and the Middle East. This decrease is attributed to the recent fall in copper LME prices, which are currently at US$8,376 per tonne.
The main reasons behind the falling imported aluminium scrap prices in India
Many participants who traditionally sourced materials from the UK and US are now turning towards Middle Eastern and Far Eastern origins due to shifting market dynamics. Major OEM players expect the domestic market to remain supportive. Despite the LME experiencing a decline compared to the previous week, materials from the UK and the US have seen a price increase due to rising freight charges.
As per SteelMint's assessment, the three-month futures for aluminium are currently at US$2,207 per tonne, and copper LME prices were recorded at US$8,376 per tonne at the time of reporting. Aluminium inventories in the LME warehouses stood at 558,550 tonnes at the close of yesterday's trading.
Outlook for the next few weeks in comparison with the prevalent situation
In the domestic market, scrap availability has slightly improved, but prices have remained range-bound. Tense scrap prices have stopped at INR 159,000 per tonne, while scrap prices for utensils have registered a price of INR 169,000 per tonne ex-Delhi (excluding GST).
Under the influence of the present market trend, it is expected that the market will continue to maintain a stagnant situation. Market participants are patiently waiting for price announcements by notable automobile firms, which could measurably influence the market.
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