India: Aluminium alloy ingot prices fall w-o-w post Maruti's price announcement for July

The Indian domestic aluminium alloy ingot market saw prices declining after the price announcement by Maruti Suzuki India Limited (MSIL). Last week, the largest automobile manufacturer, who is also a consumer of aluminium, fixed its aluminium ADC12 alloy ingots settlement prices at INR 204,000/t for July 2023.

According to SteelMint's assessment, prices of ADC12 aluminium alloy ingots slipped by INR 2,500/t w-o-w to INR 185,000-186,000/t exw-Faridabad, excluding GST. Although, some diecasters quoted buying prices of INR 180,000-182,000/t. It has been heard that one of the major producers concluded a deal of 1,500 tonnes (t) of ADC12 ingots this week.

In the export market, ADC12 was offered at $2,150/t, CFR MJP.

Market highlights

• Primary alloy producers lower prices: NALCO has reduced primary aluminium ingots (P1020, 99.7%) prices by INR 6,100/t ($74/t) on 19 Jul'23 as against prices on 14 Jul'23. Effective prices stand at INR 207,800/t ($2,531/t) exw. Following the suit, Hindalco and Balco have lowered prices by INR 2,500/t ($30/t) to INR 214,450/t ($2,615/t) and INR 212,700/t ($2,594/t) respectively.
  
  
• Domestic raw material prices dip: The local aluminium scrap market followed the trend of primary producers and saw a fall in prices. Currently, tense prices stand largely stable at INR 154,000-155,000/t while utensil prices went down by INR 1,000/t to INR 170,000-172,000/t, both exy-Delhi and excluding GST.
  
  
• India's auto sales, production drop m-o-m in Jun'23: India's automobile sales decreased by 7.4% m-o-m to 1.78 million units in June 2023, according to SIAM data. On a y-o-y basis, sales rose by 5.8% from 1.68 million units in June 2022. Meanwhile, automobile production decreased by 4.7% m-o-m to 2.02 million units in June 2023. On a y-o-y basis, the volumes fell by 2.7% from 2.08 million units in June 2022.
  
  
• LME futures inch down w-o-w: On the London Metal Exchange (LME), three-month aluminium futures prices inched down by around 2% w-o-w to $2,187/t at the time of publishing this insight compared to $2,236/t on 12 July. Meanwhile, LME aluminium stocks decreased by 7,975 t w-o-w to 517,400 t.
  
  

Outlook

Low demand from producers kept alloy prices under pressure. Rising imported scrap prices may squeeze producers' margins, creating challenges in maintaining profitability.