India: Aluminium ADC12 prices drop marginally; major automaker announces Aug'24 prices

Spot prices of aluminium ADC12 alloy ingots (non-OEM) in Delhi NCR and Chennai remained rangebound w-o-w, with just a marginal drop seen, as per BigMint's latest assessment. In the Delhi-NCR region, ADC12 spot prices were assessed at INR 212,000/t ex-Delhi, aligning with domestic Tense scrap prices, which settled at INR 180,000/t ex-Delhi.

Likewise, ADC12 prices in Chennai were reported at INR 214,500/t on immediate payment basis, excluding GST. At the same time, casting scrap prices were at INR 181,000/t ex-Chennai.

The current spread between Tense and ADC12 spot levels are at INR 29,000-30,000/t.

Major automaker adjusts ADC12 prices

India's top automobile manufacturer has set ADC12 August settlement prices at INR 222,000/t, reflecting a modest reduction of INR 1,000/t from the previous month's INR 223,000/t. Although OEMs had anticipated a decrease of INR 2,000 to INR 3,000/t for August settlement, prices have shown resilience with only minor adjustments. This stability is noteworthy despite the decrease in raw material and LME aluminium prices.

LME aluminium prices

Meanwhile, three-month LME aluminium prices fell $70/t to $2,413/t compared with the previous week's $2,485/t.

Imported scrap prices

According to BigMint's assessment, prices of tense scrap originating from the Middle East, particularly the UAE, fell slightly by $10/t to $1,870/t and zorba 95/5 from the UK was at $2,040/t CFR west coast, India.

Meanwhile, a few grades like US tense 6-7% were at rangebound levels, settling at $1,930/t CFR west coast.

Updates on ADC12

Demand for ADC12 from Japan has significantly decreased. Buyers are showing minimal interest in procuring materials.

Alloy manufacturers are refraining from aggressive scrap purchases from the import market due to ongoing volatility resulting in preference for procurement from the local market for production of ADC12.

In the Indian domestic market, demand for ADC12 is positive. As a result, participants are concentrating on the domestic market and deprioritising exports amidst the current uncertain global trade conditions.

In the imported raw material segment, material availability remains tight with the EU on summer break. Demand seems to be low as buyers are holding off on purchases, having sufficient stocks to last for at least a month. This has resulted in fewer buying inquiries.

Taint tabor prices from both the US and UAE remained elevated, as the US is exporting less TT. Additionally, the emergence of new rolling mills in the US has led to pre-purchases of TT, further driving up prices.

US TT prices are around $1,960-1,980/t in the domestic market. US suppliers expect at least $2,040-2,050/t from buyers due to which shortage of TT from the US and the UAE continues.

Last export inquiries from Mundra to Japan were at $2,340-2,350/t CFR Mundra, but offers remain at around $2,450/t.

Domestic scrap market

In the domestic market, tense scrap prices have been rangebound in both Delhi and Chennai. BigMint's assessment shows domestic tense scrap prices ex-Delhi NCR at INR 180,000/t and INR 181,000/t ex-Chennai.

However, tense is heard trading at discounts of INR 1,000-2,000/t.

India's auto exports rise over 15% in Q1FY'25

Exports of automobiles from India increased by 15.5% y-o-y during the June quarter (April-June 2024), according to SIAM data. Total shipments reached 1,192,577 units, up from 1,032,449 units last year. Passenger vehicle exports rose by 19% to 180,483 units. Maruti Suzuki India led the exports with 69,962 units during this period, compared to 62,857 units in Q1 FY'25.

China's silicon market

Prices of China's silicon 553 have dropped $100/t reaching $1,900/t CFR Mundra amid easing freight rates. However, buying interest has stayed low because major aluminium alloy manufacturers have sufficient silicon supplies leading to reduced market activity.

Additionally, the freight rate from China to Mundra was heard at $3,200-$3,400 per 20-ft container.

Deals

UAE ADC12 sold at $2,360-2,380/t CFR Mundra.

Sold ADC12 at 30-45 days credit at INR 218/kg ex Haryana.

ADC12 bought at INR 218-219/kg, ex Chennai with credit payment terms of 30-45 days.

Outlook

Prices of ADC12 are anticipated to remain rangebound. The OEMs had expected a decrease of INR 2,000 to INR 3,000/t for August settlement prices but prices have remained resilient with only a minor adjustment which is expected to be absorbed by the market.