India: Aluminium alloy ingot prices fall on subdued demand

The Indian aluminium alloy ingot market witnessed a marginal downward correction and prices declined by INR 2,000/t to INR 184,000/t w-o-w, as per SteelMint's assessment. Weekly spot ADC12 aluminium alloy ingot prices hovered at INR 183,000-184,000/t exw-Delhi, excluding GST. A few factors that could be attributed for the decline in prices are subdued demand, improved availability of raw materials along with substantial price reduction by one of the largest alloy ingot consumers via monthly settlement.

Further, futures contract prices drifted down by $30-40/t w-o-w and the recent weekly SHFE inventory levels weighed down the forward contracts.

"The price of local Silicon 553 grade has remained steady at INR 195,000/t with credit payment terms but it is generally being offered within 30-45 days," a trader informed SteelMint.

"Production levels are currently adjusted, and there is anticipation that local casting scrap prices might decrease," the trader added.

In the southern and western regions, ADC12 prices are currently being quoted in the range of INR 184,000-185,000/t, and payment terms typically involve credit days.

It is being heard that a few ADC12 offers touched close to INR 180,000-181,000/t in the Gujarat market with immediate payment terms by small to medium-sized players, which may be a matter of concern for raw material suppliers as casting scrap prices may align as per market dynamics, SteelMint notes.

Domestic aluminium scrap market

India's aluminium scrap market remained stable against yesterday's closing. Tense scrap prices stood at INR 156,000-157,000/t, while utensil scrap prices were at INR 173,000-174,000/t exy-Delhi (excluding GST).

Market participants point out that the primary concern is shortage of funds, while local demand is currently sluggish. In response to this situation, suppliers are choosing to temporarily keep prices stable. Furthermore, they are actively observing the price reduction initiated by key market players.

LME aluminium futures inched down by 0.55% to $2,168/t at the time of reporting.

Recent deals

• Around 500 t of UK-origin aluminium taint tabor (TT) C/S were sold at $1,550/t, CIF west coast.
  
  
• A container of US-origin tense mix 5-6% was traded at $1,560/t CIF Mundra.
  
  
• Around 100 t of UAE TT were sold at $1,865/t, CIF west coast.
  
  
• A container of TT with 2% from Middle East was traded at $1,860/t CIF Mundra.
  
  

Outlook
Market participants anticipate that prices of ADC12 might decrease by INR 1,000 to 2,000/t in the near future. This expectation is based on the existing selling pressure in the market.