Mr Prasad Baji of Edelweiss Securities Limited wrote in a note that aluminium scrap prices are firm after having bottomed out.
They fell only 13% from the top while steel scrap prices retreated 25% to 30% from the top showing the better strength of the aluminium market as compared to the steel market.
Copper and aluminium inventories are in declining trend thus signifying demand supply improvement.
Copper
LME inventories have been falling since March 2010 and are now down 20% plus since then. SHFE inventories also declined from peak of 0.19 million tonne in April end to 0.12 million tonne currently a reduction of over 30%.
Aluminium
LME inventories have fallen from 4.6 million tonne in January 2010 to 4.4 million tonne a reduction of 4.5%. Since an estimated 75% of LME inventory is not available to the physical market, the effective impact is 15%. SHFE inventories are also slightly down from peak of 0.42 million tonne in mid May to around 0.37 million tonne.
