India: Aluminium ADC12 alloy ingot prices in north, south inch down w-o-w on weak demand
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India's aluminium ADC12 alloy ingot spot prices experienced a slight decline w-o-w in both the northern and southern regions, driven by reduced demand and lower domestic raw material costs.
BigMint's benchmark assessments for the ADC12 (non-OEM) grade were reported at INR 208,500/tonne (t) in Delhi and INR 210,500/t in Chennai, both down by INR 1,500/t.
Meanwhile, three-month LME aluminium prices hovered around $2,385/t, reflecting a 4% decrease w-o-w. Stocks at LME-registered warehouses stood at 843,925 t. Notably, aluminium prices fell to a two-week low, influenced by reports of a slowdown in factory activity in China, the world's largest aluminium consumer, in August.
Additionally, BigMint's monthly ADC12 (automobile OEM approved) assessments, scheduled for 6 September 2024, are expected to see a slight decline due to weak demand.
What led to decline in ADC12 prices ?
The drop in ADC12 prices aligns with the decline in domestic casting scrap prices. BigMint's assessment for tense scrap was INR 176,500/t in Delhi NCR, while casting scrap in Chennai was priced at INR 177,500/t, both reflecting a w-o-w decrease of INR 500/t.
An alloy manufacturer said: "Buyer interest in ADC12 is currently weak. The drop in auto sales and the resulting inventory buildup have led automobile manufacturers to cut production, as they claim to have sufficient alloy stocks. This situation has caused buyers to be less aggressive, leading to lower bidding prices."
Additionally, the current spread between tense scrap and ADC12 spot prices stands at INR 32,000-33,000/t.
Alloy import, export market trends
India's imports of aluminium ADC12 alloy ingot have remained steady. The offer prices for ADC12 originating from Malaysia are at $2,460-$2,470/t to Mundra and $2,430-$2,440/t to Chennai.
A source mentioned, "Most alloy ingot manufacturers are opting to import ingots directly because imported scrap prices remain high despite the decline in LME aluminium prices. Currently, the prices of imported aluminium scrap are driven more by supply-demand dynamics than by LME levels. Additionally, importing from Malaysia benefits from the Free Trade Agreement (FTA)."
The landed cost of Malaysian material in Chennai is approximately INR 206,000-208,000/t, which is lower than the cost of domestically available material.
Looking at India's export scenario, global demand remains weak, with Japan, India's top export destination, hesitant to accept the current offer levels. Indicative offer prices from India to Japan are at $2,360-2,380/t, while bid levels are considerably lower, ranging from $2,300-2,320/t.
Imported scrap trend
China's silicon market
According to BigMint's assessment, prices of China's silicon 553 remained stable w-o-w at $1,720/t CFR Mundra. Meanwhile, supplier offers were at $1,750-1,760/t, while bids were reported at $1,700-1,710/t.
Outlook
The market is expected to remain around current levels, closely tracking LME trends, with a potential for further price declines. Trading activity is likely to remain subdued.
