India: Aluminium ADC12 prices dip INR 2,500/t w-o-w as domestic scrap rates edge down
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According to BigMint's latest assessment, spot prices for aluminium ADC12 alloy ingots in Delhi NCR and Chennai decreased by INR 2,500/t w-o-w. In the Delhi NCR region, ADC12 spot prices were assessed at INR 212,500/t, ex-Delhi, coinciding with a decline in domestic tense scrap prices, which settled at INR 182,500/t ex-Delhi.
Likewise, ADC12 prices in Chennai were reported at INR 213,500/t for immediate payment basis, excluding GST. At the same time, casting scrap prices fell by INR 2,500/t w-o-w, settling at INR 183,500/t ex-Chennai.
Meanwhile, three-month LME aluminium prices at the time of reporting were largely stable at $2,515/t compared with the previous week's $2,522/t.
The decline in prices was attributed to the decrease in imported scrap prices, particularly for grades like tense and taint tabor which are crucial raw materials in the production of ADC12 ingots. According to our assessment, tense scrap prices from the US fell by $60/t to $1,860/t, while taint tabor prices (USA, HRB-3%) were at $2,000/t following a $25/t correction.
Interestingly, the price difference between tense scrap and ADC12 remained consistent at INR 30,000/t in both the northern and southern regions. This spread showed stability w-o-w.
Market updates
A source said, "Although the largest automobile manufacturer has increased ADC12 prices for July, expectations indicate a decline to INR 207,000-INR 210,000/t in the coming weeks. Currently, LME prices are the primary driver affecting raw material costs, thereby influencing domestic ADC12 prices. "
An alloy manufacturer informed, "India's ADC12 exports have declined. Typically, Japan is the primary destination for India's ADC12 exports, but demand in Japan has yet to recover. This has led to higher domestic inventories in India, contributing to the slight drop in prices and demand."
Offers for ADC12 to Japan from the UAE and India range from $2,460-$2,500/t. Meanwhile, bids are at $2,400-$2,420/t levels. Significant bid-offer disparities of around $50-$60/t are being seen.
Another source stated, "In India, purchasing interest for scrap is likely to stay muted, with a potential uptick anticipated post July. Alloy producers seem adequately stocked with scrap, sufficient to fulfill orders for the next one-two months. This surplus is largely attributed to delayed shipments received in May from bookings placed between January and March."
The current offer levels for ADC12 originating from Malaysia have also witnessed a slight drop moving down to $2,360-$2,400/t CFR Chennai.
China's silicon market
According to BigMint, prices of China's silicon 553 have increased to $2,040/t CFR Mundra, marking a $15/t rise attributed largely to escalating freight rates, especially in Southeast Asia, amid ongoing port congestion and container shortages.
Furthermore, purchase interest remained subdued as key aluminium alloy manufacturers have ample silicon supplies, contributing to decreased market engagement.
Shipping costs from China to Mundra were reported at $4,000-$4,200 per 20-ft container.
Outlook
Looking forward, it is expected that prices of alloy ingot ADC12 may experience a slight decline primarily due to ongoing uncertainties surrounding LME aluminium price direction and subdued demand conditions.
