India: Aluminium alloy ingot prices move downward amid limited buying

The domestic market for aluminium alloy ingots is experiencing limited demand due to the volatility in global futures, which has led to a decline in production activities. According to SteelMint's assessment, prices of ADC12 aluminium alloy ingots fell slightly to INR 190,000-192,000/t ex-works Faridabad, excluding GST.

Following the decline in the major commodity exchange, LME, significant market participants find themselves in a state of uncertainty, leading them to adopt a cautious wait-and-watch approach. Meanwhile, sellers are unwilling to engage in transactions that would incur losses.

In addition, original equipment manufacturers (OEMs) have negotiated discounted prices based on quantity and payment terms. However, small- and medium-scale producers have chosen to decrease their production capacities by up to 50% in response to the ongoing market volatility.

Sources said that, one of the largest automobile companies, which acts as a price setter for aluminium alloy ingots, might reduce the prices of ADC12 alloy ingot in the upcoming months.

Prominent producers like BALCO and NALCO maintained their ADC12 prices. BALCO's list prices are at INR 213,950/t, while NALCO's prices are at INR 205,450/t, down INR 5,900/t w-o-w. Prices are ex-works excluding GST.

Furthermore, the domestic market also witnessed a bearish trend. It is worth noting that sellers are hesitant to sell their materials at lower rates following the correction in LME prices. Tense prices were recorded at INR 154,000-156,000/t, while taint tabor prices were at INR 157,000-159,000/t, both exy-Delhi, excluding GST. The spread between tense and ADC12 almost remained largely stable at INR 36,000/t.

China's silicon 553 is priced at $1,870-1,890/t (INR 153,845- 155,492/t) CIF western Indian coast, excluding taxes.

On the London Metal Exchange (LME), three-month aluminium futures and spot prices fluctuated around $2,167/t w-o-w, at the time of publishing this insight compared to $2,173/t on 28 June. Meanwhile, LME aluminium stocks increased by 10,050 t w-o-w to 544,400 t.

It is anticipated that the market will likely continue to exhibit volatility in the near term. Consequently, market participants are expected to adopt a cautious approach for buying the material.