India: Aluminium alloy ingot prices drift up on moderate trade

Domestic prices of aluminium alloy ingot ADC12 witnessed a rise of INR 2,000/t to INR 197,000/t w-o-w following Maruti's announcement of monthly settlement prices for March 2023.

The recent price increase has been attributed to moderate buying interest among major alloy ingot producers with the commencement of the new financial year. However, sales of ADC12 may increase from mid-April onwards.

A trader source said: "Mills were pushing for a higher realisation of INR 3,000-4,000/t amid higher raw material costs such as that of tense scrap in the domestic as well as import markets over the last few days, as average LME prices in the last 10 days were recorded at $ 2,379/t against $2,288/t in the previous 10-day period."

Some west coast-based mills were heard to have exported about 90-100 t to Bangladesh on immediate payment terms which seems quite tough as local prices are at INR 192,000-196,000/t, substantially higher than bids delivered to the dock, an indentor source informed. But the deals could not be confirmed at the time of reporting.

Another north India-based mill source said: "Indicative tradable values for ADC 12 are at INR 193,000-194,000/t exw Faridabad against the offering price of INR 197,000-198,000/t with credit payment."

Established market players are quoting offer prices which are higher by INR 10,000-15,000/t compared with the mid-sized manufacturers. Further, alloy ingot manufacturers are currently operating at around 50-60% capacity and a few buyers are submitting bids even lower than the face value, according to sources.

Domestic aluminium scrap prices remained stable day-on-day today, with tense prices reported at INR 162,000/t ($/t) exy-Delhi and extrusion at INR 174,000/t ($/t) exy Delhi.

On the London Metal Exchange (LME), three-month aluminium futures and spot prices hovered around $2,350-2,370/t w-o-w.

Aluminium stocks were estimated at 520,100 t, down from 529,175 t last week.

LME aluminium futures have slightly declined by 0.55% to $2,357/t.

The recent price revision of aluminium ingots by the primary players has not significantly impacted local scrap prices.

Outlook

SteelMint learned that aluminium alloy ingot prices may remain supportive in the near term amid higher automobile sales during March and sources expect that trade volumes should rise in the new financial year.