India: Aluminium alloy ingot prices move up on active trade

Domestic prices of aluminium alloy ingot ADC12 moved up by INR 2,000/t to INR 199,000/t, w-o-w at. The upward trend was attributed to moderate transactions among original equipment manufacturers (OEM), SteelMint learnt.

Medium-scale alloy ingot producers observed the selling pressure owing to limited buying interest for sub-standard quality or close to appropriate chemical composition said by one of the Faridabad-based manufacturers.

I personally see that production capacity utilisation may be affected in the near term among medium-scale producers as the workforce generally opts out owing to severe heat and the same has been announced by the government metallurgical department too but time duration would be limited shared by one of the traders based in the western region.

Another small-scale producer shared that established trade associates or Original Equipment Manufacturers (OEM's) might not be that much affected whether you say low demand or limited workforce amid a healthy realisation due to substantial raw material procurement from the domestic as well as overseas markets and maintained supplies to their regular customers.

OEM's play a critical role in the manufacturing sector by designing and producing components and products for a range of industries. "In recent times, the suppliers of OEMs have been performing better amid advancements in the die-casting industry" quoted a reliable source.

Furthermore, the die-casting industry has also witnessed some improvements in recent times, driven by the growing demand for lightweight materials, particularly in the automotive and aerospace industries.

It has been heard that the prices of alloy ingots in the northern region of India have been affected by reasonable alloy ingot supplies from Gujarat-based manufacturers. This would have been possible due to lower freight charges being coastal-based importers, whereas, northern region-based scrap importers are supposed to pay the freight charges from the port of discharge to inland containers depot (ICD's) which is ultimately added to their overall costing, shared by another trader.

For instance, prices of scrap hovers around INR 158,000-160,000/t exy Gujarat against INR 163,000-164,000/t exy Delhi excluding GST.

The Gujarat-based manufacturers are offering their alloy ingots at a lower price, which is attracting buyers from the northern region. This has resulted in a decrease in demand for alloy ingots from local manufacturers in the northern region.

The silicon 883-grade prices were recorded at 198000-200000/t and 553 grade INR 210,000/t with credit payment terms, Ex Delhi, excluding GST.

On the London Metal Exchange (LME), three-month aluminium futures and spot prices hovered at around $2,260-2,440/t w-o-w. Balco's ADC12 price was up INR 11,750/t w-o-w to INR 236,200/t today.

Outlook

Market players are not in a situation to foresee any price prediction but most of the trade channels expect that the near-term prices would be a range-bound without any major contraction and a few have shared that after the Eid holidays raw-material supplies might be better specifically in the domestic market and overseas might remain with moderate supply I:e; unchanged, SteelMint learnt.