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India

India has maintained its position as the world’s fastest-growing major economy, achieving 8.4% growth when comparing the final quarter of 2023 and with that of 2022. Projections indicate that India is poised to overtake Japan and Germany to become the world’s third-largest economy in the coming years. Expectations have been exceeded by this exceptional growth, driven primarily by a robust performance by the manufacturing sector.  

The increase in the HSBC India Manufacturing PMI from 56.5 in January to 56.9 in February was led by exports, which showed their strongest expansion since May 2022. Business confidence was the second highest in the survey’s history. 

The World Bank sees India’s growth remaining firm at 6.3% in 2024, while the International Monetary Fund has raised its forecast for India’s economic growth to 6.5% for the upcoming financial year. However, India’s infrastructure spending and thereby its industrial output might slow over the next quarter.

India’s foreign direct investment experienced a 13% fall to US$ 32.03 billion during last year’s April-December period, mainly as a result of reduced investments in such sectors as computer hardware/software, telecommunications, automotive and pharmaceuticals, according to the most recent government data.  

Availability of copper scrap in India was quite good in the previous quarter. Local prices ruled below import parity. In fact, India exported a good quantity of scrap as an export arbitrage window opened. Availability remains good in the current quarter but tightness is expected to emerge from the next quarter.

LME copper prices have bounced to a year high with support from a weakening dollar index and a stabilizing global manufacturing PMI. The cascade effect was felt in the domestic market too. Demand for copper products from downstream industries remains good.

Motor scrap prices have risen by US$ 60 per tonne CFR Mundra, or by 6% quarter over quarter.

In the aluminium market, the ripple effects of the Red Sea crisis are showing in freight rates and scrap availability. Imported scrap has become expensive and delayed arrivals have been adding to the woes of India’s recyclers. Rising scrap prices and falling refined metal values have cut deep into the margins of recyclers, who are finding it commercially lucrative to raise the share of primary metal in the raw material mix.

Domestic demand for flat rolled products is robust owing to heavy building and construction expenditure by the government and private sector. However, demand should stabilize in upcoming quarters owing to a slowdown in government spending ahead of the general elections in India.

Demand in the aluminium alloy segment is strong on the back of healthy order books for the automobile and aviation sectors, with prices rising to INR 205,000 per tonne (US$ 2470) delivered to customers in India. Meanwhile, prices for Zorba 95/5 climbed some 9% from US$ 1818 per tonne CFR Nhava Sheva in October last year to US$ 1966 this March. Over the same period, Tense prices increased by around 6% from US$ 1575 per tonne CFR Nhava Sheva to US$ 1669. An upward trajectory is anticipated in alloy market prices owing to domestic material shortages coupled with delayed arrivals of imports.

Sales of deox and notch bar are stable owing to consistent demand from steel manufacturers, and prices in the domestic market have increased by US$ 100 to 120 per tonne this quarter.

Zinc sales have fallen in the current quarter owing to sluggish demand; scrap availability has been sufficient to cater for the demand from downstream and secondary manufacturers. As for lead, prices have seen some declines since the previous quarter, with remelted lead ingot (Pb99%) dropping by US$ 23 since December to US$ 2137 per tonne ex-Delhi.

Anirudha Agrawal

Manaksia Aluminium CO LTD. (IND), Guest contributor


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India


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