India: Aluminium ADC12 spot prices rise, spread shrinks
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As per BigMint assessment, spot prices for aluminium ADC12 alloy ingot experienced a slight uptick of INR 3,000/t, reaching INR 216,000/t w-o-w exw Delhi NCR. Notably, tense Ex-Delhi reached INR 186,000/t, marking a weekly increase of INR 3,000/t. The scrap-to-ADC12 spread continued to dwindle due to the prevalence of cheaper imports from FTA countries.
Market sources indicated offers in Chennai hovering around INR 185,000/t, with spot prices for ADC12 in Chennai ranging between INR 216,000/t to 217,000/t exw on immediate terms, excluding GST.
Market dynamics: Buyers cautious amid rising prices, producers confront losses
A northern alloy producer has revealed that their ADC12 production is currently running at 60-70% capacity. This scenario has emerged due to elevated scrap prices and relatively lower ADC12 sales prices in the market. The gap between scrap and semi-finished products has narrowed.
An alloy producer commented, "Currently, we have adjusted production to a certain level. We are currently able to procure tense scrap at around INR 188,000/t - 190,000/t, with a premium of INR 2,000/t compared to the market level, thereby adding additional costs to the company."
Small and medium-scale ADC12 producers are adopting a cautious "wait and see" approach.
Conversely, larger ADC12 manufacturers are actively seeking materials at reasonable prices. Notably, despite rising ADC12 prices, the price differential between scrap and semi-finished products remained unchanged. Mills are operating with a spread of INR 30,000/t instead of the earlier INR 35,000/t trend.
Currently, silicon 553 from China is priced at $1,850/t CFR Mundra, reflecting an increase due to market demand.
Pricing trend
According to BigMint assessments, imported tense scrap prices from the Middle East, particularly from the UAE, increased by $65/t to $1,965/t yesterday. Tense (6-7%) from the US was reportedly at $1,980/t, up by $30/t. The price for zorba 95-5 from the UK stood at $2,100/t CFR Nhava Sheva.
However, three-month futures for aluminium were currently at $2,569/t, showing a slight 4% increase w-o-w.
Recent deals
70 t ADC12 were traded at INR 228,000/t ex Haryana on 30-45 credit payment terms.
EU zorba 95-5 was traded at $2,100 for 100t CIF WC India.
20 t ADC12 were sold at INR 216,000/t, ex Chennai.
China silicon 553 for 50 t bought at $1,850/t, CFR Chennai.
Outlook
Considering the reduced spread, producers anticipate a price hike in ADC12 relative to scrap cost. OEMs may likely take this into account.
