India: Maruti Suzuki lowers ADC12 alloy ingot prices m-o-m for Jul'23

Maruti Suzuki India Limited (MSIL), India's largest automobile manufacturer and consumer of aluminium, has released its monthly settlement prices of aluminium ADC12 alloy ingots for July 2023 at INR 204,000/t. These prices are down by INR 2,900/t m-o-m compared to its June 2023 settlement prices at INR 206,900/t.

According to market participants, lower demand and subdued exports, especially to Japan, prompted the auto major to lower settlement prices for the current month.

Notably, Maruti Suzuki's ADC12 prices are the standard for determining domestic aluminium price trends.

As per SteelMint's assessment, ADC12 prices decreased by INR 3,000/t and stood at INR 187,000-189,000/t exw-Faridabad (excluding GST).

Maruti Suzuki's auto production fall, sales up y-o-y in Jun'23

Maruti Suzuki posted a 5.3% y-o-y decrease in total automobile production at 137,133 units, including passenger vehicles and light commercial vehicles, in June 2023 compared to 144,409 units produced in June 2022.

Automobile sales upped by 2.3% y-o-y to 1,59,418 units in June 2023 compared to 1,55,857 units in June 2022. Domestic passenger vehicle sales rose by 8% to 1,33,027 units in the month under review against 1,22,687 units in June 2022.

Meanwhile, the company's exports fell by 17% y-o-y to 19,770 units in June 2023 compared to 23,833 units in the corresponding month of the previous year. The decrease in exports was primarily attributed to the ongoing chip shortage, which has adversely affected the production capabilities of Maruti Suzuki's manufacturing plants.

Automotive industry updates

• India's auto sales, production drop m-o-m in Jun'23: India's automobile sales decreased by 7.4% m-o-m to 1.78 million units in Jun'23, according to SIAM data. On a y-o-y basis, sales rose by 5.8% from 1.68 million units.
  Meanwhile, automobile production decreased by 4.7% m-o-m to 2,024,703 units in June 2023. Similarly, on y-o-y basis, the volumes fell by 2.7% from 2,081,148 units in June 2022.
  
  
• China's automotive sales increase m-o-m in Jun'23: China's automobile sales increased by 10.1% m-o-m to 2.622 million units in June 2023, according to China Association of Automobile Manufacturers (CAAM's) data. On a y-o-y basis, sales rose by 4.8%. In the January-June 2023 period, auto sales increased by 9.8% y-o-y to 13.239 million units.
  Meanwhile automobile production increased by 2.5% y-o-y to 2.561 million units in June.
  
  

Domestic market overview

The domestic aluminium alloy ingot market witnessed a price decline this week due to sluggish demand. Trade remained dull throughout the week. However, a slight upward price correction was observed in raw materials recently. Market participants noted a moderate supply of aluminium tense scrap alongside good demand.

Tense prices were recorded at INR 152,000-154,000/t, ex-Delhi, excluding GST. Imported tense scrap of US-origin prices were at $1,630-1,650/t, CFR Nhava Sheva.

Small scale producers in the northern region maintained their production capacities at around 60-70% in response to the ongoing market volatility. In contrast, the western India's aluminium market dominated due to positive demand, better supply, and availability of imported raw materials. Notably, one of the established OEM associates or alloy exporters in the western region recently achieved record-breaking sales.

Outlook

Due to a volatile market trend and ongoing seasonal factors, market participants expect the aluminium alloy ingots market to remain challenging, making them adopt a wait-and-watch approach.