The ongoing Middle East conflict has disrupted scrap supplies to India's aluminium producers, leading to a sharp increase in costs. Scrap prices have jumped by nearly 30% since the Iran conflict began earlier this year, according to industry executives, squeezing margins and depleting inventories.
The turmoil in the region has caused significant supply chain disruptions, affecting the flow of scrap metal to Indian manufacturers. This has forced producers to seek alternative sources or pay higher prices, further straining their financials.
Executives noted that the price surge is unprecedented, with no immediate relief in sight. Many companies are now operating with reduced inventory levels, raising concerns about production continuity.
The aluminium industry in India heavily relies on scrap imports, particularly from the Middle East. The conflict has not only raised costs but also created uncertainty about future supplies.
Industry experts warn that if the situation persists, it could lead to higher aluminium prices in the domestic market, impacting downstream industries such as automotive and construction.
