India: Aluminium alloy ingot prices drop INR 2,000/t w-o-w

The domestic market for aluminium alloy ingots saw limited demand amid volatile global futures which affected production activities. According to SteelMint's assessment, prices of ADC12 aluminium alloy ingots fell to INR 191,000-192,000/t ex-works Faridabad, excluding GST.

In an effort to meet demand in the market, Original Equipment Manufacturers (OEMs) have been striving to maintain their production up to a certain level. However, small- and medium-scale producers have opted to reduce their production capacities, and some manufacturers have even temporarily halted production due to prevailing market volatility.

According to a credible source, "The market continues to face selling pressure, leading to deals happening at discounted rates". However, the exact volumes of these trades was not disclosed at the time of publishing this report.

Prominent producers like BALCO and NALCO have released their ADC12 prices. BALCO's list prices are at INR 213,950/t, a drop of INR 3,750/t w-o-w, while NALCO's prices are at INR 211,350/t, down INR 5,500/t w-o-w. Prices are ex-works excluding GST.

Meanwhile, tense prices were recorded at INR 156,000-158,000/t, while taint tabor prices were at INR 159,000-160,500/t, both exy-Delhi, excluding GST. The spread between tense and ADC12 almost remained range-bound at INR 35,000/t. China's silicon 553 is priced at $1,875-1,895/t CIF western Indian coast, equivalent to INR 153,900-155,545/t (excluding taxes).

Market participants are anticipating a further decline in aluminium tense scrap prices, with expectations ranging from a decrease of INR 1,000 to INR 2,000/t. Additionally, there is the possibility of a price reduction by one of the largest automobile companies, which is a price setter for aluminium alloy ingots.

On the London Metal Exchange (LME), three-month aluminium futures and spot prices fluctuated around $2,150-2,220/t w-o-w, at the time of publishing this insight compared to $2,230-2,270/t on 21 June.

There is anticipation that the market will remain volatile in the coming weeks. As a result, market participants are expected to adopt a wait-and-watch approach, closely monitoring market conditions before taking positions.