India: Aluminium ADC12 alloyed ingot prices decline w-o-w amidst weak demand

India's spot prices of aluminium ADC12 alloyed ingots 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 at INR 206,500/tonne (t) in Delhi and INR 208,500/t in Chennai, both down by INR 2,000/t.

Meanwhile, three-month London Metal Exchange (LME) aluminium prices hovered at around $2,366/t, reflecting a 3% decrease w-o-w. Stocks at LME-registered warehouses stood at 831,350 t.

Factors behind the decline in ADC12 prices

ADC12 prices dropped w-o-w due to weak market demand and sluggish trading activity. Many alloy manufacturers are selling ADC12 at a loss, which has put further pressure on prices.

The influx of ADC12 into the Chennai market from Thailand and Malaysia has weakened domestic demand. The landed cost of imported ADC12 is INR 3,000-4,000/t cheaper than the domestic material, largely due to the free trade agreement (FTA) benefits.

The decline in domestic ADC12 prices corresponds with the drop in India's casting scrap prices. BigMint's assessment showed that tense scrap in Delhi-NCR was priced at INR 173,500/t and casting scrap in Chennai at INR 174,500/t, both reflecting a w-o-w decrease of INR 2,000/t.

An alloy manufacturer stated, "Demand for ADC12 is currently low. The decline in auto sales and the subsequent build-up of inventory have prompted automakers to reduce production, citing ample alloy stock. Consequently, buyers have become more cautious, which has driven down bidding prices."

Additionally, the spread between tense scrap and ADC12 spot prices stood at INR 32,000-33,000/t.

Drop in imported scrap prices

Imported aluminium scrap prices in India fell by up to 2.8% w-o-w, driven by a decline in aluminium prices on the LME. Transaction volumes remained low, largely due to bid-offer mismatches in the market for key grades. The price drop was influenced by growing competition from the Far East and weak demand in major markets such as India, where port strikes have disrupted supply chains. The Far East's higher offers for scrap materials, including taint tabor (TT), extrusion, and tense, further pressured prices.

Global market trends of aluminium alloys

Japan's buying activity has seen a slight improvement, with recent deals closing at around $2,400/t from the UAE. In July, there were strong import volumes for A356 and ADC12 alloys. However, September is expected to be quieter, with slightly lower volumes. This is primarily due to reduced demand, as many buyers currently hold ample inventories.

At present, major OEMs are sourcing alloyed ingots directly from Thailand and Malaysia.

Imported ADC12 - indicative levels

• UAE, CFR Mundra: $2,380/t
  
  
• Malaysia, CFR Chennai: $2,420-2,450/t
  
  
• UAE, CFR Japan: Offers at $2,430-2,440/t, with bids at $2,380-2,390/t
  
  

Special alloys

• A356, UAE, CFR Mundra: $2,675/t
  
  
• LM6, UAE, CFR Mundra: $2,540-2,550/t
  
  

LM24, UAE, CFR Mundra: $2,550-2,600/t

BigMint's assessments

BigMint's benchmark assessments show that tense from the UAE was priced at $1,790/t, down 2.2% w-o-w, while zorba 95/5 from the UK was assessed at $2,070/t, both CFR west coast, India.

China's silicon market

According to BigMint's assessment, prices of China's silicon 553 declined by $30/t w-o-w to $1,690/t CFR Mundra. Meanwhile, offers from the supplier side were at $1,740-60/t, and bids were heard at $1,760-80/t.

Sea freight rates from China to Mundra remained largely stable w-o-w, ranging within $1,550-1,600 per 20 feet (ft) container.

Additionally, market sources anticipate an increase in silicon prices in the coming weeks due to a slight improvement in demand.

Outlook

The market is expected to stay near current levels, closely following LME trends, with the possibility of additional price declines. Trading activity is expected to remain muted.