India: Aluminium alloy ingot prices remain stable on moderate trade

Domestic prices of aluminium alloy ingot ADC12 remained stable w-o-w at INR 197,000/t. The stability was attributed to moderate buying interest, despite the commencement of the new financial year.

While the production level of established market players has remained mostly unchanged, there seems to be some selling pressure as producers are offering minor discounts to their regular trade associates.

Furthermore, future bookings of the material remain on the lower side, indicating a potential slowdown in demand. However, "most of the participants expect that alloy ingot demand may rebound in the near term", informed a north India-based original equipment manufacturing (OEM) source.

The die-casting industry is currently experiencing limited capacity utilisation due to the introduction of new technologies in the automobile sector. As a result, the supply chain in components has been affected owing to limited consumption.

A Faridabad-based medium-scale alloy ingot producer informed that the situation has been further exacerbated by lower capacity utlisation resulting in production cuts but selling pressure is limited due to reduced output and thus lesser inventory levels.

Domestic aluminium scrap prices remained stable day-on-day today, with tense prices reported at INR 162,000-164,000/t ($1,974-2,001/t) exy-Delhi, excluding taxes.

On the London Metal Exchange (LME), three-month aluminium futures and spot prices hovered at around $2,270-2,370/t w-o-w. Balco's ADC12 price was down INR 11,000/t w-o-w to INR 224,450/t today.

Aluminium stocks were estimated at 512,700 t, down from 520,100 t last week.

The primary producers' continuous reduction in prices of aluminium ingots has not significantly impacted local scrap prices but it may weigh down local scrap prices marginally in the near term, said a trader.

Outlook

SteelMint has learned that prices for aluminium alloy ingots are expected to remain stable in the near future, with a potential rebound in demand on the horizon. However, the market may face conflicts due to fluctuations on the LME and the continuous decrease in prices by major primary producers of alloy ingots. These factors could create a challenging environment for the aluminium alloy ingot industry.