Middle East crisis sends Indian aluminium scrap prices soaring as supply dries up

INDIA – India’s imported aluminium scrap market has recorded sharp week-on-week price surges, with UK-origin Zorba jumping US$115 per tonne and US-origin Tense climbing US$120 per tonne, as Middle East geopolitical tensions choke global recycling feedstocks.

According to market assessments, UK-origin Zorba 95-5 scrap rose to US$2,810 per tonne, while US-origin Tense 6-7 percent scrap hit US$2,495 per tonne as of 17 March 2026.

The price spikes track firmer London Metal Exchange trends, with three-month aluminium closing prices increasing 1 percent to US$3,417 per tonne, while LME inventories declined 2.6 percent to 442,825 tonnes.

Supply Chain Chaos Hits Recycling Feedstocks

The Middle East, accounting for approximately 9 percent of global aluminium supply, faces mounting pressure as conflict disrupts shipping through the Strait of Hormuz.

Aluminium Bahrain has shut three smelting lines representing 19 percent of its 1.62 million-tonne capacity due to raw material supply issues.

Qatar’s Qatalum has also curtailed output, tightening global availability of primary metal and scrap.

Market activity has slowed as buyers adopt a cautious approach amid elevated prices.

Traders note bids for US-origin Taint Tabor scrap remain below offer levels. Demand concentrates in automotive alloy scrap grades such as Tense.

Logistical Nightmare Compounds Price Pressures

Supply constraints have been aggravated by severe logistical challenges. High freight costs and War Risk Surcharges have increased landed costs.

No fresh offers are currently being received from the Middle East, with exports from key hubs like the UAE disrupted.

Port operations at Jebel Ali have been impacted, with containers loaded but not assigned vessels.

Emirates Global Aluminium is rerouting exports through Oman’s Sohar port, trucking alumina to UAE smelters, a costly workaround highlighting logistics constraints.

Domestic Indian Market Feels the Pinch

Domestically, supply tightness persists despite rising prices. Scrap availability has declined, pushing Tense scrap prices in Chennai to around INR 243,000-245,000 per tonne (approximately US$2,800-2,825 per tonne).

Casting scrap and Tense prices in Delhi and Chennai have risen by INR 5,000-8,000 per tonne (US$58-92) amid shortages.

Outlook Remains Volatile

India’s aluminium scrap market is expected to remain firm but subdued, supported by elevated LME prices and ongoing supply disruptions.

Tight scrap availability and limited offers amid Eid-related slowdown will likely keep prices elevated until supply visibility improves.

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