India: Aluminium ADC12 prices rise even as raw material prices remain stable

Aluminium ADC12 alloy ingot (automobile equivalent) spot prices increased marginally by INR 3,000/t to INR 211,000/t w-o-w exw Delhi, excluding GST.

Presently, tense offers in Chennai stand at INR 182,000/t. However, tradable levels are in the range of INR 180,000-181,000/t. Additionally, the spot price for ADC12 in Chennai stands at INR 214,000- 215,000/t exw, excluding GST, marking an increase of INR 2,000/t compared to the previous week.

A key Indian automotive company revealed its monthly settlement price for ADC12, raising it by INR 5,000/t to INR 212,400/t for April. However, market participants suggest this increase happened due to consistently higher raw material prices in the domestic market but OEM prices are supposed to be reasonably higher in comparison to the spot market, as the price setter's rates appear to be less aggressive compared to current market dynamics. Materials are being offered at premiums of up to INR 220,000/t, with credit payment terms.

Market insights from participants

ADC12 prices remained supportive in line with demand-supply mismatch as demand seemed to be high and supply consistently remained within a narrow range.

An alloy producer stated, "We have refrained from engaging in new purchase enquiries, particularly for ADC12 unless the price is at least INR 215,000/t - with an advance payment term. However, we may consider a small portion of the supply at premium bids. For new buyers seeking credit, prices will start at INR 220,000/t and above."

Considering the present market conditions, the ADC12 ingot supply chain poses a significant challenge. Manufacturers are experiencing limitations due to scarce availability of casting scrap, leading to difficulties in accommodating appropriate margins.

Another manufacturer has stated that the during the final days of a financial year generally participants postpone immediate transactions and new trades may begin in the next fiscal year.

Pricing trend

Imported tense scrap prices from the Middle East, particularly from the UAE, rose by $15/t to $1,850/t yesterday. Tense (6-7%) from the US was heard at $1,900/t, up by $15/t. The price for Zorba 95-5 from the UK stood at $2,050/t CFR Nhava Sheva.

However, three-month futures for aluminium were currently at $2,283/t, reflecting a $15/t rise w-o-w. China-origin silicon 553 prices were at around $1,940/t CIF Mundra, down $80/t w-o-w.

Recent deals and offers

ADC12 offers from the UAE to CFR Chennai - $2,460-2,470/t.

ADC12 offers from the UAE to CFR Mundra - $2,450/t.