India: ADC12 aluminum alloy ingot prices continue to inch higher following LME surge

Spot prices of aluminium ADC12 alloy ingots (non-OEM) in Delhi NCR and Chennai increased by INR 2,000/t w-o-w, according to BigMint's latest assessment. In Delhi-NCR, ADC12 spot prices were assessed at INR 210,000/t ex-Delhi, aligning with domestic tense scrap prices, which settled at INR 177,000/t ex-Delhi.

The major reason for increse in alloy prices was the surge in LME levels.

In Chennai, ADC12 prices were reported at INR 212,000/t on an immediate payment basis, excluding GST. Casting scrap prices in Chennai were at INR 178,000/t ex-Chennai.

The current spread between tense and ADC12 spot levels stood at INR 32,000-33,000/t. Meanwhile, three-month LME aluminium prices hovered around $2,500-2,510/t, up 1.5% w-o-w. Stocks at LME-registered warehouses totalled 870,950 t.

Aluminium scrap and ADC12 arrivals rise

In July 2024, India's aluminium scrap imports rose by 2.4% compared to the previous month to 171,604 t, However, imports were up by 4% compared to the same period last year, according to provisional data from BigMint.

In July 2024, India's aluminium ADC12 imports surge by 94% compared to the previous month to 3,585 t.

Increasing scrap and LME futures push up ADC12 alloy ingot costs

The limited availability of raw materials, combined with rising scrap prices and the surge in LME futures, has increased the cost of ADC12 alloy ingots.

A seller said, The market is currently seeing a resurgence in trade activities, with increased buying interest and some transactions occurring with imports of material surging.

However, India's exports of alloy ingots remain subdued due to weak overseas demand, particularly from Japan, a key market for Indian exports.

A group of Indian port workers' unions has called for a strike to demand immediate settlement of pay revisions and pension benefits which can lead to further delayed shipments, which have a global impact on trade, as per reports.

Global price trend

According to BigMint's assessment, tense scrap from the Middle East, particularly the UAE, saw a increase of $35/t, settling at $1,815/t. Zorba 95/5 from the UK was up by $20/t to $2,020/t CFR west coast, India.

Pakistan alloy aluminium ingot with high zinc 4% to 5% $2,170/t CFR Port Ningbo.

Pakistan off grade ADC12 sold at $2,220/t CFR Port Ningbo.

ADC12 offers from Malaysia, stood at $2,480-2,500/t CFR Chennai.

ADC12 offers from Malaysia, CFR West Coast India were at $2,350-2,360/t.

UAE, CFR Japan $2,380-2,390/t, though buyer interest remains very weak .

China's silicon market overview

Prices of China's silicon 553 edged down to $1,720/t CFR Mundra amid easing freight rates.

Additionally, the freight rates from China to Mundra were heard at $1,600-$1,610/20-foot container.

Domestic scrap market

In the domestic market, tense scrap prices edged up w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 177,000/t ex-Delhi NCR and INR 178,000/t ex-Chennai. Market participants expect prices to move up in the near term.

Deals

Al Taint tabor clean traded at $2200/t CFR Mundra recently.

Al extrusion clean traded at $2400/t CFR Mundra recently.

Aluminum Zorba 96/4 traded from Australia to CFR Hong Kong at $2070/t.

Al wheels traded at $2400/t from Australia to CFR Chennai.

Al extrusion traded at 97% LME From Australia to CFR Mundra.

Al tense 2% traded at $1950/t from Australia to CFR Chennai.

Outlook

The market is likely to stay near current levels, tracking LME trends closely, with a possibility of prices inching higher. Trading activity has picked up and is expected to grow if LME prices continue to rise.