The Red Sea crisis, which began in October 2023 and escalated over time, led to a shipping crisis that severely disrupted global trade and supply chains. This situation particularly affected routes through the Suez Canal, a vital passageway that handles roughly 30 per cent of the global container trade. Consequently, trade volumes decreased significantly in early 2024.
Ships were forced to reroute around Africa's Cape of Good Hope, increasing shipping and insurance costs. The delayed delivery of goods disrupted global supply chains, resulting in squeezed profit margins.
This disruption also negatively impacted aluminium scrap imports into India, especially from the Middle East and the UK, which supply 40-45 per cent of India's total scrap volumes. The decline in aluminium scrap imports led to increased demand for semi-finished products like alloy ingots. Imports of aluminium scrap, the key raw material for manufacturing alloy ingots, experienced a notable 8 per cent drop in the first half of the year, falling to around 809,100 tonnes from 875,000 tonnes in the first half of 2023.
