India: Aluminium alloy ingot prices fall to a 6-month low on slow demand

The domestic aluminium alloy ingot market experienced a decline in prices as transaction volumes decreased due to sluggish demand throughout the week. According to SteelMint's assessment, prices of ADC12 aluminium alloy ingots fell to a six-month low at INR 187,000-189,000/t ex-works Faridabad, excluding GST.

To adapt to market conditions, original equipment manufacturers (OEMs) have adjusted their prices based on quantity and payment terms. Meanwhile, producers in the northern region have continued to maintain their production capacities somewhere around 60-70% in response to the ongoing market volatility.

In contrast, the western India's aluminium market was positive in terms of demand and supply compared to the northern region.

Key market updates-

• Maruti Suzuki lowers ADC12 prices for July: Maruti Suzuki, one of the largest automobile companies, has reportedly decreased its monthly settlement prices for aluminium ADC12 alloy ingots by INR 2,900/t m-o-m to INR 204,000/t for July 2023, yet not confirmed till the time of publishing this report. It is worth mentioning that Maruti Suzuki plays a crucial role in setting prices for ADC12 aluminium alloy ingots in the domestic market.
  
  
• Balco cuts ADC12 prices, Nalco's stable: Prominent producers like BALCO and NALCO have released their ADC12 prices. BALCO's list prices are at INR 213,200/t, down by INR 750/t w-o-w, while NALCO's prices are at INR 205,450/t, stable w-o-w. Prices are ex-works, excluding GST.
  
  
• Domestic scrap prices increase: In the domestic market, raw materials observed a slight upward price trend today. Market participants said that there is a tight-to-moderate supply of aluminium tense scrap in the market while demand is good. Tense prices were recorded at INR 152,000-154,000/t, while taint tabor prices were at INR 157,000-158,000/t, both exy-Delhi, excluding GST. The weekly spread between tense and ADC12 remained largely stable at INR 35,000/t.
  
  
• China's automotive sales increase m-o-m: China's automobile sales increased by 10.1% m-o-m to 2.622 million units in Jun'23, according to China Association of Automobile Manufacturers (CAAM's) data. On a y-o-y basis, sales rose by 4.8%. In Jan-Jun'23, auto sales increased by 9.8% y-o-y to 13.239 million units. Meanwhile, automobile production increased by 9.8% m-o-m and 2.5% y-o-y to 2.561 million units in June.
  
  
• LME futures inch up w-o-w: On the London Metal Exchange (LME), three-month aluminium futures prices, both, inched up to around $2,200/t w-o-w at the time of publishing this insight compared to $2,142/t on 5 July. Meanwhile, LME aluminium stocks decreased by 7,975 t w-o-w to 531,725 t.
  
  

Outlook

It is expected that the aluminium alloy ingots market would be affected by the ongoing seasonal factors. Meanwhile, LME futures are likely to remain range-bound considering the inventory levels.