India’s aluminium extrusion manufacturers are accelerating their shift to the US, Europe and the UK for scrap as a temporary UAE export prohibition disrupts traditional supply channels. Nearly 300 manufacturers have already turned to these markets, according to Vikram Jhunjhunwala, managing director of Century Extrusion.
More than 305 small- and medium-sized extrusion manufacturers in India previously sourced around 70–75% of their input material from Saudi Arabia and the UAE. After the UAE export restriction, manufacturers initially turned to Southeast Asia to replace lost supplies. However, scrap availability in these markets has reached saturation. Manufacturers are now increasingly sourcing scrap from the US, Europe and the UK, Jhunjhunwala, who is also president of the Aluminium Secondary Manufacturers Association (India), told SMM.
Dubai Customs imposed a four-month temporary export prohibition on specified industrial-use waste and scrap through Customs Notice No. 13/2026 issued on June 10. The ban is effective until October 8, 2026, and is subject to automatic renewal unless officially revoked.
The prohibition covers specified scrap under HS Code 7204 for iron and steel, HS Code 74040000 for copper, and HS Code 76020000 for aluminium.
Import data shows shift in sourcing
India’s aluminium scrap import data reflects the changing sourcing pattern. Imports under HS Code 76020010 from the UAE fell 1.19% year on year to $38.80 million in June 2026. Imports during April–June declined 26.59% to $77.81 million.
Imports from the UK rose 79.90% to $43.80 million in June and increased 53.33% to $116.54 million during April–June. Imports from the US rose 81.55% to $121.95 million in June and 69.31% to $285.96 million during April–June.
The figures point to a clear shift towards the US and UK as alternative sources of aluminium scrap as UAE supplies weaken.
Scrap 
Discount to LME aluminium narrows sharply
The supply disruption has significantly narrowed the discount of extrusion scrap to LME aluminium. In early June 2026, when LME three-month aluminium reached $3,787.50/mt, extrusion scrap was available at around $3,200/mt, a discount of nearly $588/mt.
By July 24, LME three-month aluminium had fallen to around $3,170/mt, while extrusion scrap was offered at $2,900–3,000/mt. The discount had therefore narrowed to just $170–270/mt.
The narrowing discount highlights the relative strength of extrusion scrap prices despite the fall in LME aluminium, reflecting tight availability following the UAE export prohibition.
Higher
Attachment pressures manufacturers’ margins
The sourcing shift is also creating additional cost pressure for secondary aluminium manufacturers. UAE-origin extrusion scrap was relatively cleaner, while material sourced from the US, UK and Europe typically contains 4–12% attachment.
Higher attachment reduces recoverable metal yields and increases processing requirements, putting pressure on manufacturers’ margins.
Freight costs have also changed with the shift in sourcing. Indian buyers previously paid around $50–60/mt more in freight for UAE-origin scrap than for shipments from the US and Europe, despite the UAE’s shorter distance from India.
However, lower freight costs from the US and Europe do not necessarily mean lower overall sourcing costs. The higher attachment in these shipments results in greater processing costs and lower metal recovery, offsetting some of the freight savings and further squeezing manufacturers’ margins.
Outlook
In the short term, Indian aluminium extrusion manufacturers are likely to face continued raw material cost volatility and margin pressure as they adjust to alternative scrap sources. Higher attachment levels in US, UK and European material could keep processing costs elevated. Over the longer term, the disruption could encourage manufacturers to diversify their sourcing base further, reducing reliance on the UAE and Southeast Asia and creating a more geographically diversified aluminium scrap supply chain for India.
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