India: Aluminium ADC12 ingot prices edge down m-o-m amid softening in scrap market

Aluminium ADC12 prices were recorded at INR 219,000/t ex Delhi, a decrease of INR 2,000/t m-o-m, as per BigMint assessment. In Chennai prices were recorded at INR 218,000/t, a drop of INR 1,000/t m-o-m. However, bids are INR 3,000-4,000/t lower.

Better availability and a drop in scrap prices have led to a decrease in the price of ADC12 alloyed ingots.

Meanwhile, spot prices of aluminium ADC12 alloyed ingots (non-OEM) in Delhi NCR and Chennai remain firm, as per latest assessment. In the Delhi-NCR region, ADC12 spot prices were assessed at INR 209,000/t ex-Delhi, aligning with domestic tense scrap prices which settled at INR 174,000/t. Bids are at INR 165,000-170,000/t ex-Delhi.

Likewise, ADC12 prices in Chennai were reported at INR 211,000/t on immediate payment basis, excluding GST. At the same time, casting scrap prices were at INR 176,000/t ex-Chennai.

The current spread between tense and ADC12 spot price levels is at INR 33,000-34,000/t, widening by INR 3,000-4,000/t from previous levels of 29,000-30,000/t.

LME and imported price trend

Three-month LME aluminium prices hovered at $2,260-2,265/t, fell 1% w-o-w. Stocks at LME-registered warehouses stood at 918,000 t. Aluminium prices are still hovering at multi-month lows.

Tense scrap from the Middle East, particularly the UAE, decreased by $30/t settling at $1,700/t. Zorba 95/5 from the UK also decreased by $15/t to $1,960/t CFR West Coast, India.

A credible seller source stated, "We are supplying smaller quantities to our regular buyers while we restock. Our strategy is to release the inventory at higher prices after the monsoon season to achieve profit margins."

A buyer stated, "We have stocked up in advance and do not need more for at least a month. Right now, we are only making need-based purchases in small quantities."

A trader stated that largescale sellers are offering material at rates in sync with a major automobile company; however, INR 1,000-2,000/t discounts were heard offered in view of weak market sentiments.

Domestic scrap market

In the domestic market, tense scrap prices have decreased w-o-w by INR 1,000/t in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 174,000/t ex-Delhi NCR and INR 175,000/t ex-Chennai. This decline aligns with falling LME aluminium prices and sluggish market trends.

India's imports of scrap, alloyed aluminium ingots

Imports of aluminium scrap, a key raw material for manufacturing alloyed ingots, saw a notable 8% drop in the first half of calendar year 2024 (H1CY'24) to around 809,100 t from 875,000 t in H1CY'23.

India's imports of alloyed aluminium ingots surged 60% to around 112,158 t in H1CY'24. Volumes in the same period of 2023 were 70,780 t.

China's silicon market

Prices of China's silicon 553 have dropped $30/t reaching $1,760/t CFR Mundra amid easing freight rates. However, buying interest was low because major aluminium alloy manufacturers have sufficient silicon supplies.

Additionally, the freight rate from China to Mundra was heard at $2,100-$2,200/20-foot container.

Imported Offers

• ADC12, Malaysia: CFR Chennai at $2460-2500/t.
  
  
• ADC12, UAE: CFR Mundra at $2300-2330/t.
  
  
• ADC12, UAE: CFR Japan at $2350-2380/t (offers), bids are as low as $2200-2250/t.Special Alloys (Indicative)
  
  
• LM24: 216-220/kg ex Chennai
  
  
• A356: 230-233/kg ex Chennai
  
  
• LM24, UAE: CFR Mundra at $2440-2460/t, A356, UAE: CFR Mundra at $2530-2550/t
  
  

Outlook

The market is expected to remain sluggish due to uncertainty around LME prices and multiple holidays, including the long weekend coinciding with Independence Day and Janmashtami, involving extended holidays. However, after the holidays prices may see a positive trend.