India: Aluminium alloy ingot prices remain range-bound w-o-w

The Indian domestic alloy ingot market has experienced stability in prices amid firm scrap prices, range bounded futures contracts, and price cut by primary producers by up to INR 5,250/t ex. According to SteelMint's assessment, the prices of ADC12 aluminium alloy ingots are steady at INR 188,000-190,000/tonne (t) exw-Faridabad, excluding GST.

The aluminium alloy ingot ADC12 market in India is currently characterised by a state of moderate demand, where average deals have shown weekly improvement, resulting in range-bound price levels. Original equipment manufacturer associates within the industry have reported that the overall supply situation appears to be stable, with minor production adjustments being made to meet the demand.

However, despite the relatively balanced supply, the market remains competitive, suggesting that manufacturers are competing to secure their positions.

"In terms of regional dynamics, suppliers from the western region have managed to assert dominance over the northern region market. This phenomenon can be attributed to the reasonable costs associated with landed materials as compared to local offers," a source informed.

This pricing advantage might explain the shift in market share towards western region suppliers, indicating that cost considerations are playing a pivotal role in buyers' decisions.

One notable challenge in the industry continues to be the tight availability of aluminium scrap tense, a crucial component for the production of ADC12. This scarcity has led some buyers to offer premiums to ensure the continuity of their operations.

Recent reports have surfaced regarding potential export deals involving ADC12. These deals have been communicated at a price range of $2,200 to $2,220/t CIF Japan. However, the confirmation of these prices from the sellers' end is still pending. This uncertainty underscores the fluidity of the market conditions and the challenges associated with establishing concrete price benchmarks.

Looking at the overall industry landscape, larger manufacturers express optimism for the near future as they strive to align their production utilisation with the prevailing market dynamics.

On the other hand, smaller and medium-sized players continue to face challenges, with around 40% of them experiencing a halt in production. This divide between larger and smaller players highlights the varying degrees of resilience within the industry.

An additional factor impacting the market is the price of silicon, a key component in aluminium alloy production. Silicon prices have remained range-bound within the levels of $1,810 to $1,820/t w-o-w. This price stability might influence market sentiment, contributing to the overall cautious optimism among manufacturers.

In conclusion, the aluminium alloy ingot ADC12 market in India is characterised by moderate demand, incremental improvements in average deals, and competitive dynamics.

While the supply appears to be stable with minor adjustments, the dominance of western region suppliers over the northern region market indicates the significance of cost considerations. The scarcity of aluminium scrap tense continues to challenge operations, leading to some buyers offering premiums. Export deals remain uncertain in terms of price confirmation, and the market is divided between larger manufacturers' optimism and smaller players' production constraints.

The price of silicon adds another layer of complexity to the market dynamics. All in all, the market is in a state of flux, with players adapting to the ever-changing conditions in the pursuit of sustainable growth.

Market highlights

• Primary alloy ingot producers hike prices: India's primary aluminium producers, Balco and Nalco, have decreased alloy ingot (ADC12) prices by up to INR 3,600/t ($43/t). Post-revision, Balco's prices stand at INR 217,700/t ($2,627/t) while Nalco's prices are at INR 212,250/t ($2,561/t). All prices are exw, excluding GST.
  
  
• Domestic raw material prices down w-o-w: The local aluminium scrap market witnessed slightly downward trend in prices d-o-d. Currently, tense scrap prices stand largely stable at INR 156,000/t while taint tabor scrap prices are at INR 158,000-159,000/t, both exy-Delhi and excluding GST.