India: Aluminium alloy ingot prices remain supported by rising futures, tight scrap supply

The Indian domestic alloy ingot market witnessed a slight increase in prices amid an uptick in futures as well as tight raw material supply. According to SteelMint's assessment, prices of ADC12 aluminium alloy ingot stood firm at INR 186,000-187,000/tonne (t) exw-Faridabad, excluding GST.

Original Equipment Manufacturers (OEMs) are participating in the market with moderate trade. Market participants have noted that the tight liquidity in the domestic market has led buyers to shift from cash payments to credit payments.

On the other hand, small and medium-scale manufacturers have reported that the supply of ADC12 alloy ingot is yet to fully recover, as certain die-casting companies are not fully operational.

According to sources, A356 alloy ingot prices stood at INR 238,000-240,000/t exw in the western region with a credit payment of more than 30 days. Similarly, Delhi-origin silicon 553 prices hover at INR 180,000/t with a credit payment of 30-45 days.

Market highlights-

• Primary alloy ingot producers hike prices: India's primary aluminium producers, Balco and Hindalco, have increased ingot (P1020, 99.7%) prices by INR 2,250/t ($28/t). Post revision, Balco's prices stand at INR 211,250/t ($2,576/t) while Hindalco's prices are at INR 211,000/t ($2,773/t). All prices are exw, excluding GST.
  
  
• Domestic raw material prices up: The local aluminium scrap market witnessed a rise in prices after primary producers announced a price hike. Currently, tense prices stand largely stable at INR 155,000-156,000/t while taint tabor scrap prices are at INR 160,000-161,000/t, both exy-Delhi and excluding GST. The domestic market is facing tight supply of scrap specifically auto-casting scrap grade and taint tabor.
  
  
• Maruti Suzuki's Aug'23 price announcement awaited: Maruti Suzuki India Limited (MSIL), India's largest automobile manufacturer and consumer of aluminium, will likely fix its August 2023 ADC12 prices at INR 203,000/t, but a confirmation from the company's side is awaited. Its monthly settlement prices for July 2023 were at INR 204,000/t.
  
  
• LME futures inch up w-o-w: On the London Metal Exchange (LME), three-month aluminium futures prices inched up by 0.7% w-o-w to $2,218/t at the time of publishing this insight compared to $2,203/t on 18 July. Meanwhile, LME aluminium stocks decreased by 425 t w-o-w to 516,975 t.
  
  

Outlook

A shortage of scrap may keep aluminium alloy ingot prices steady in the near future, with a slight improvement expected under positive circumstances. This could be further supported by early price announcements from one of the leading automobile companies.