India: Aluminium ADC12 prices stable w-o-w despite escalating raw material prices

Aluminium ADC12 alloy ingot (automobile equivalent) spot prices remain stable at INR 204,000/t w-o-w exw Delhi, excluding GST. This stability is observed despite an increase in local Tense scrap prices in both north and south India where shortages are reported, according to BigMint assessment.

Presently, tense offers in Chennai stand at INR 172,000/t-173,000/t. However, bids are in the range of INR 170,000-171,000/t. Additionally, the spot price for ADC12 in Chennai stands at INR 208,000-210,000/t exw.

Market dynamics: Insights from participants

ADC12 prices have remained largely unchanged during the week, even amid tight availability of Tense scrap. This scarcity is impacting the capacity utilization ratio for some mid-scale manufacturers in the northern region.

"We are still worried about getting enough Tense scrap, So we are being careful about future bookings of ADC12. We are sticking to monthly or quarterly contracts and checking our raw material stocks and upcoming deliveries before accepting new orders for ADC12", stated an aluminum alloy manufacturer.

Participants expect settlement prices for ADC12 with major automobile manufacturers in India to remain stable in April. Some anticipate revisions in March prices, while others foresee potential increases in April.

Currently, the A356 alloy ingot reference price is hovering around INR 215,000-217,000/t with immediate payment term, exw Delhi. In the western region, reference prices are around INR 218,000-220,000/t, exw Gujarat with a credit payment term, excluding GST.

Non-automotive buyers are facing challenges in purchasing ADC12 due to limited availability in the market. Furthermore, bookings made for imported material during January-February'24 are yet to be delivered and are expected to arrive around May. This delay raises concerns about a potential shortage in March, contributing to a further increase in prices, an ADC12 producer based in south India said.

However, following rationalisation and normalization later in the evening, there were reports of scrap and semi-finished prices being traded at premiums of INR 1,000-2,000/t in the domestic market. In north India, it was learned from sources that Tense material is currently being traded at premiums, approximately at 176,000/t ex Delhi.

Pricing trend

Imported Tense scrap prices from the Middle East, particularly from the UAE, rose by $55/t to $1,750/t on yesterday's assessment. Tense (6-7%) from the US was heard at $1,825/t, up by $25/t. The price for zorba 95-5 from the UK stood at $2,025/t CFR Nhava Sheva.

However, three-month futures for aluminium were currently at $2,183/t, reflecting a range-bound level w-o-w. China-origin silicon 553 prices were at around $2,030/t CIF Mundra, firm w-o-w.

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 173,500/t, while taint tabor prices are at INR 171,500/t exy-Delhi (excluding GST).

Recent deals

Export offers from India West coast to Japan is currently heard at 2,470-2,500/t levels.

Offers from ADC12 from Malaysia to CFR India have been heard at $2,450/t levels.

Around 10 t tense scrap was heard being sold at INR 172,500/t, exw Chennai.

Around 25 t USA-origin aluminium extrusion was traded at $1,880/t CIF West Coast India recently.

Outlook

Limited availability of tense scrap in the domestic market, delayed imported consignments, and a price hike by a major automobile company are expected to drive domestic ADC12 prices upward in the near term.