Aluminium Scrap Price Trend and Forecast

Aluminium Scrap Regional Price Overview

Get the latest insights on price movement and trend analysis of Aluminium Scrap in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Aluminium Scrap Price Trend for the Q3 of 2024

During the third quarter of 2024, aluminium scrap prices in India experienced a downward trend, influenced by stable London Metal Exchange (LME) prices and broader market uncertainties. Prices for all grades of aluminium scrap dropped week-on-week, driven by a combination of factors, including steady three-month LME aluminium prices, which remained within a narrow range. This price stability on the LME, coupled with relatively high stock levels in LME-registered warehouses, contributed to subdued aluminium scrap prices that hovered near three-month lows.
 

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The European holiday season further added to market sluggishness, creating a bid-offer disparity that impacted scrap imports into India. Specifically, prices for aluminium scrap from the UAE and the UK saw declines, with notable reductions in the prices of Tense and Zorba grades.

Additionally, India’s aluminium scrap imports declined significantly during the first half of 2024, which further contributed to price weakness. In contrast, there was a marked increase in imports of alloyed aluminium ingots, indicating a shift in the material supply landscape. Domestically, aluminium scrap prices followed a similar downward trajectory, with tense scrap prices in majority of the Indian cities reflecting the broader market trend and LME price movements.

The outlook for the remainder of the quarter remained uncertain, as the market grappled with LME price stability, ongoing holidays, and subdued demand. However, there was cautious anticipation surrounding the August alloys price settlement, which could potentially impact the direction of scrap prices in the latter part of the quarter. Market participants remained cautious, closely monitoring developments that could influence both scrap and alloy prices moving forward.

Analyst Insight

According to procurement resources, the price of Aluminium Scrap is expected to continue its southward trajectory in the quarters ahead as the supply of the commodity is likely to surpass its procurement rates.
 

Aluminium Scrap Price Trend for the Q2 of 2024

In Q2 2024, aluminium scrap prices in Europe remained elevated, driven by tight supply and robust demand, particularly from Asian markets. European aluminium alloy producers encountered significant challenges in sourcing sufficient scrap feedstock, as strong international demand from countries like China and India continued to divert substantial volumes of scrap away from Europe. Compounding these issues, lower scrap generation within the region was noted, primarily due to reduced industrial activity and a sluggish construction sector.

Additionally, the increased utilization of aluminium scrap by primary metal producers - spurred by advancements in processing technology and a commitment to greener production methods further constrained the availability of scrap for secondary alloy producers. This confluence of factors led to rising scrap prices throughout the quarter, despite relatively stable alloy prices, which in turn squeezed profit margins for alloy manufacturers. The seasonal summer slowdown in Europe, characterized by plant and yard closures for maintenance, exacerbated the scarcity of scrap, intensifying competition among buyers eager to secure limited supplies. As a result, the market dynamics in Q2 2024 reflected a complex landscape where rising prices underscored the challenges faced by European producers amidst strong global demand and constrained local supply.

Analyst Insight

According to Procurement Resource, Aluminium scrap prices are expected to remain elevated as demand continues to outpace supply. The ongoing tightness in scrap availability, will likely sustain upward pressure on prices.
 

Aluminium Scrap Price Trend for the Q1 of 2024

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During the second quarter of 2024, the aluminium scrap market experienced notable fluctuations, influenced by varying factors in both domestic and international contexts. Throughout this period, the aluminium scrap market in India showed sluggish movement, with buyers adopting a cautious approach due to a minor decline in LME aluminium prices. This price dip was partly due to the relaxation in imported raw material consignments, which kept imported aluminium scrap prices relatively low and stable.

Market activity remained subdued, leading sellers to lower their offers in an effort to liquidate materials. This trend was further exacerbated by sluggish trade activities and a lack of significant upward fluctuations in the imported aluminium scrap market. Also, in the domestic market, prices of ADC12 alloy ingot, also experienced a decline as well.

This was reflected in the widening scrap-to-alloy price spread, indicating a growing disparity between raw scrap and processed alloy prices. The inventory levels of aluminium stocks in LME-registered warehouses surged significantly, reaching their highest levels since January 2022. This increase in inventory levels contributed to the downward pressure on prices, as higher stock levels typically signal an oversupply in the market.

Additionally, India's economic conditions played a role in shaping the aluminium scrap market. Consumer price inflation showed signs of moderation, primarily due to persistent food inflation, which influenced overall market sentiment. This easing of inflation rates, while positive for consumers, did not significantly stimulate purchasing activity in the aluminium scrap market, where buyers remained cautious amid the fluctuating prices and market conditions.

Analyst Insight

According to Procurement Resource, the price of Aluminium Scrap is expected to follow a complex interplay of factors, including international price movements, regional market dynamics, and broader economic indicators.
 

Aluminium Scrap Price Trend for the Second Half of 2023

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The aluminium scrap market exhibited mixed price trends throughout the second half of the year 2023. However, surprisingly, the aluminium scrap market performed better than the metal aluminium market. The scrap prices, though, started on a lower note at the beginning of the said period in July, impressively improving steadily for the next few months.

Though the movements in prices were very marginal and confined, the overall market sentiments were relatively positive in the gloomy times of global trade. At first, the monthly average prices in the European market went from around 1190 USD/MT (FOB) in July’23 to about 1130 USD/MT in August’23, showcasing a sudden decline of about 5%. However, the prices started to slowly incline after that and finished at about 1164 USD/MT in December’23, registering a 3% incline from August.

Analyst Insight

According to Procurement Resource, the Aluminium Scrap prices are likely to rise further in the coming months since industrial demands are expected to surge after the end of this holiday season.
 

Aluminium Scrap Price Trend for the First Half of 2023

In the first quarter of 2023, the demand for aluminium scrap declined by almost 4 percent as compared to the previous quarters in the US and Canadian markets. However, the market conditions were still stable as compared to the previous quarters due to the increased interest of utility companies and the government in the electrical grid systems. In addition to this, the rates of exports to international buyers also inclined several folds while the import rates declined significantly, providing the falling market dynamics of aluminium scrap a cushion.

The situation in European countries was also the same as seen in the US and Canada. The main cause of fluctuations in the prices of aluminum scrap in this region was the low inflow of the product. The backlog of new orders placed continued to hamper the growth of the aluminium scrap price trend in the first two quarters of 2023. Further, the consumer sector in the region also seemed under the pressure of poor performance of the economy, rising interest rates, and soaring costs of energy production, which eventually led to a fall in the index of consumer purchasing potential.

Analyst Insight

According to Procurement Resource, the price of Aluminium Scrap is expected to follow an oscillating trajectory as the consumers seem to be suffering from uneven market conditions and negatively sliding economic conditions.

Procurement Resource provides latest prices of Aluminium Scrap. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.