India: Aluminium ADC12 price tracks strengthening raw material trend

Aluminium ADC12 alloy ingot automobile original equipment manufacturers (OEMs) experienced an m-o-m increase in prices of aluminium ADC12, rising by INR 6,000/t to reach INR 204,000/t exw Delhi, excluding GST.

Whereas, ADC12 alloy ingot spot prices rose by INR 1,500/t w-o-w to INR 198,500/t, exw Delhi, excluding GST.

What's driving up costs?

In the north Indian market, the shortage of raw materials, specifically tense scrap, has led to elevated prices. With tense scrap currently priced at INR 167,000-168,000/t exy Delhi, excluding GST.

India's largest automobile manufacturer and the price settler in the domestic aluminium alloy ingot space, announced its monthly aluminium alloy ingot ADC12 settlement prices at INR 199,500/t for February 2024, up by INR 8,500/t m-o-m.

Prices have risen to a five-month high since September 2023, which has been absorbed in the market this week, data maintained by BigMint revealed.

Market commentary

Shifting the focus to the raw materials scenario in Chennai, there is a notable scarcity, and the present level hovers up to INR 165,000/t, exy Chennai, excluding GST, reliable sources shared with BigMint.

The western region is currently grappling with a shortage of aluminium scrap material, impacting various industries reliant on recycled aluminium. Increased demand, supply chain disruptions, and geopolitical factors contributed to this scarcity, posing challenges for businesses dependent on sustainable sourcing shared by one of the established players based in northern India.

The consistent surge in aluminium scrap prices can be attributed to skyrocketing freight charges caused by the Red Sea issue. Disruptions in shipping routes affected the supply chain, while the Middle East, particularly the UAE region, is not providing sufficient material. This combination of logistical challenges and reduced availability intensified market pressures, driving prices higher shared by other manufacturers,

A manufacturer of small to medium-scale aluminum alloy ingots has conveyed that they have already secured bookings for future orders up to a specific timeframe. This strategic decision is a response to a significant shortage of the essential raw material, namely casting scrap, BigMint noted.

Imported tense scrap prices from the Middle East, particularly from the UAE, fell by $20/t to $1,700/t yesterday. Tense (6-7%) from the US was heard at $1,760/t, down by $15/t. The price for zorba 95-5 from the UK stood at $1,960/t, down $25/t w-o-w.

However, three-month futures for aluminium were currently at $2,227/t, reflecting a weekly decrease of approximately $50-60/t.

China-origin silicon 553 prices were at around $2,070/t CIF Mundra, down $40/t. It is anticipated that silicon prices will remain stable from this week until 16 February due to the Lunar New Year.

Domestic market

In the domestic space, scarcity of raw materials, particularly tense scrap, has kept prices on the higher side. Tense scrap prices are at INR 166,000/t, while taint tabor scrap prices are at INR 167,000/t exy-Delhi (excluding GST).

Around 20 t tense scrap was heard sold at INR 166,000/t ex Ahmedabad.

Recent deals

Around 40 t ADC12 was heard traded at INR 198,000/t with 30 days credit payment terms Ex Delhi NCR.

Around 600 t USA-origin aluminium zorba 95/5 was traded at $1,950/t CIF West Coast India.

Around 250 t USA origin taint tabor HRB 3% was heard traded at $1,770/t CIF West coast India.