Offers for most domestic aluminium scrap grades fell in Mumbai and settled flat in Delhi, driven by the weakness in demand and the three-month LME official aluminium contract from the prior week.
Offers came under pressure in Mumbai as traders are keen to offload material bought at higher prices.
The weekly Davis Index for EC wire stood at Rs185,000/mt del Mumbai consumer, down by Rs11,000/mt ($151.12/mt) on the back of the drop in LME three-month price and low demand from secondary manufacturers due to production cuts. Traders dropped offers fearing a further plunge in aluminium contract on LME.
Last week, there was a severe shortage of cleaner scrap material as traders continued to offer scrap material at higher prices.
The official three-month LME contract dropped by $137/mt in a week to $2,337/mt on May 24 from $2,479/mt on May 17.
In Maharashtra, demand dropped due to restrictions and a slowdown in industrial activities. Manufacturers fear that lockdown measures may continue even after May 30. Auto companies and small manufacturers are facing demand uncertainty as well as shortage of labourer crunch.
The weekly Davis Index for Old cast (Purja) for Mumbai on Tuesday settled at Rs136,000/mt del consumer and the index for Old sheet in Mumbai fell by Rs7,000/mt to settle at Rs142,000/mt del consumer on Tuesday.
In Mumbai, the index for aluminium utensils on Tuesday settled at Rs150,000/mt del Mumbai consumer, down by Rs4,000/mt on the back of the drop in the official three-month LME contract.
The weekly Davis Index for the Old sheet and EC Wire in Delhi settled flat at Rs147,000/mt and Rs182,000/mt, respectively.
Market participants shared that trades were almost nil during the lockdown period. Buyers are interested only in thin volumes to meet immediate requirements. Scarcity of scrap material persists and domestic demand continues to remain weak as downstream industries have idled production.
The weekly Davis Index for the Old cast (Purja) settled flat at Rs136,000/mt del Delhi consumer due to weak demand from secondary manufacturers. The weekly Davis Index for aluminium utensils also settled flat at Rs149,500/mt del Delhi consumer from prior Tuesday.