India is witnessing a surge in imported aluminium prices this week driven by several factors, including a notable increase in futures, limited availability of material, and a positive shift in demand. Across various grades of aluminium scrap, prices have risen by approximately $25-35/t w-o-w.
According to BigMint's assessment, Tense scrap of Middle East (UAE) origin has experienced a $20/t increase, reaching $1,720/t. Simultaneously, scrap prices from the US have seen a $30 per tonne (t) hike, now standing at $1,790/t w-o-w.
Notably, the sellers have reported that Zorba 95-5 of UK origin is currently facing challenges in the Indian market due to the Red Sea incident. As a result, Tense Scrap is gaining preference among buyers.
Furthermore, an indentor shared with BigMint that the prices for Zorba 95-5 grade are mismatched, with only a few buyers bidding close to $2,000/t till last week in Chennai, whereas this week, if we normalize the bid prices, it is in the range from $1,920-1,930/t. However, BigMint's assessment stands at $1,960/t due to lower bids.
Buyers have stated that India is experiencing material shortages, particularly in Tense scrap, which has led to a continuous increase in prices for both domestic and imported materials. In Chennai, buyers bid around $1,900/t CIF with a 2% attachment of Australian origin.
The bid-offer dynamics for certain scrap grades exhibit inconsistencies, introducing an element of uncertainty into the market. The three-month futures for aluminium are at $2,240/t, up by $25/t w-o-w, in line with LME registered warehouse inventories, which stand at 525,250 tonnes.
Talk scrap from the Middle East (UAE), and the US has seen a decrease of up to $50/t, driven by the recent decline in copper's three-month LME cash prices. Current copper LME prices hover at $8,290/t, down $90-100/t w-o-w.
Moving on to China-origin silicon 553 prices, the market is almost closed during the Chinese Lunar New Year holidays, with only a few participants actively trading. As a result, there were no firm prices in the market.
Silicon 553 is priced at approximately $2,030/t CIF Mundra, down $40/t.
Meanwhile, sellers from the Middle East (UAE) offering Zinc diecast with 4-5 per cent attachment are quoting prices ranging from $1,920-1,930/t CIF. However, the bids are below the $1,900/t level, resulting in BigMint's assessment prices being set at $1,905/t CIF West Coast.
In the domestic market, the scarcity of raw materials, particularly Tense scrap, has contributed to higher prices. Tense scrap prices are INR 170,000/t, while utensil scrap prices are INR 168,000/t ex-Delhi (excluding GST).
Looking ahead, considering the current market situation, it is expected that scrap prices may increase due to shortages in the country.
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