India: ADC12 aluminium alloyed ingot OEM prices drop to 9-month low, market awaits further clarity

• Demand yet to pick up following festive season
  
  
• Slow auto sector, weak exports weigh on prices
  
  

Prices of aluminium ADC12 alloyed ingots declined m-o-m across both northern and southern regions in India, largely due to ongoing sluggish demand in the automotive sector and a weakened export market. Notably, prices of the OEM-approved ADC12 grade plunged by up to INR 6,000/tonne (t) m-o-m to a nine-month low of INR 209,000/t in Delhi and INR 210,000/t in Chennai.

Prices of ADC12 aluminium alloy ingots in India saw a slight decline w-o-w, with the market remaining subdued following the festive season. Despite expectations of a post-festive season recovery, demand is yet to pick up significantly, leaving prices under mild pressure. Market participants continue to monitor for signs of improvement, but general sentiment remains cautious.

Meanwhile, three-month London Metal Exchange (LME) aluminium prices declined slightly by $20/t w-o-w to around $2,630/t.

OEM-approved ADC12 prices hit 9-month low

BigMint's benchmark monthly assessments for the OEM-approved ADC12 grade stood at INR 209,000/t in Delhi and INR 210,000/t in Chennai, down by up to INR 6,000/t m-o-m. Prices hit a nine-month low, last seen in February 2024.

Most companies are quoting INR 208,000-212,000/t for OEM-grade ADC12, making this range the most preferred for current trades. This price point allows steady demand and aligns with market expectations, as buyers find this range favourable for transactions.

Non-OEM ADC12 prices inch down w-o-w

BigMint's weekly assessments for ADC12 (non-OEM) grade stood at INR 200,000/t in Delhi and INR 202,000/t in Chennai, down by INR 2,000/t w-o-w.

Raw material prices hold steady

Prices of the basic raw material for aluminium alloys, that is scrap, remained largely stable m-o-m. BigMint's assessment for tense scrap originating from the UAE was at $1,770/t, down by 2% m-o-m. Meanwhile, zorba 95/5 from the UK held steady m-o-m at $2,075/t, both CFR west coast, India.

The aluminium scrap import volume remained unchanged in September at 158,174 t, compared to 158,083 t in August.

In the domestic market, tense scrap prices fell slightly w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap stood at INR 171,000/t ex-Delhi NCR and INR 172,000/t ex-Chennai.

The scrap to semi-finished spread was at INR 29,000-30,000/t.

China's silicon offers remain stable

Prices of China's 553-grade silicon remained steady w-o-w at $1,740/t CFR Mundra. Meanwhile, offers from the suppliers' side were at $1,760-1,770/t. However, bids were heard lower, at $1,710-1,720/t.

Freights from China to Mundra for 20-foot containers stood at $1,800.

ADC12 import offers

Imported offers for ADC12 included UAE-origin material priced at $2,380-2,390/t CFR Mundra, while in India, offers were at $2420/t CFR major Japanese port (MJP), with bids at $2360-2380/t. Payment terms for imports from Japan are immediate.

India's imports of ADC12 decreased as well, primarily due to softer domestic demand and lower prices within the local market, making imports less attractive. Additionally, demand for special alloys outside of ADC12 saw a similar downturn.

Export market remains subdued

The ADC12 export market slowed significantly, with exports to Japan dropping due to continued weak demand in that region. This decline reflects a broader downtrend, as other export markets for ADC12 are also seeing limited activity.

Outlook

Looking ahead, a recovery in the ADC12 market is unlikely before 2025. Most industry participants expect market conditions to remain subdued through the end of 2024, with some optimism for improvement by March or April next year.