Offers for most of the domestic aluminium scrap grades increased in Delhi and Mumbai on an increase in demand from Japan for ADC 12. Domestic demand for the alloy, however, remains subdued.
Profit margins for secondary manufacturers have dropped as scrap prices have gone up by 50pc since last year. Participants shared that the manufacturers are restricting production in a weak domestic market. Secondary manufacturers currently have large inventories and are unlikely to resume full-fledged production anytime soon.
The Davis Index for old sheet was up by Rs250/mt ($3.35/mt) to Rs140,500/mt del Delhi consumer on Tuesday. Some traders kept their bids at Rs142,000/mt del consumer.
The Davis Index for old cast (Purja) remained unchanged this week at Rs126,500/mt del Delhi consumer, despite a slight increase in demand from Japan. Stringent lockdown in their country has kept Malaysian sellers out of the export market. The Southeast Asian country is a significant exporter of ADC 12 alloys to Japan. India has thus stepped in to fill the void left by Malaysian exporters.
The Davis Index for aluminium utensils increased by Rs2,250/mt from a week ago and settled at Rs148,000/mt del Delhi consumer.
Deals in Mumbai were very few as manufacturers are witnessing weak demand from auto companies.
The Davis Index for EC wire increased by Rs3,250/mt this week and settled at Rs188,250/mt del Mumbai consumer amid a rise in the LME three-month aluminium contract. Scrap prices quoted by traders were at par with global aluminium prices. Secondary manufacturers in West India, however, are unwilling to accept these levels amid weak domestic fundamentals.
The official three-month LME aluminium contract rose by $81/mt and settled at $2,558.5/mt on July 5 from a week ago.
The Davis Index for Old cast (Purja) and old sheet was up by Rs1,500/mt and Rs2,000/mt from the preceding week and settled at Rs127,000/mt and Rs146,000/mt del Mumbai consumer, respectively.
The index for Mumbai’s aluminium utensils on Tuesday was up by Rs5,000/mt del Mumbai consumer and settled at Rs152,000/mt del Mumbai.