India: Non-OEM aluminium alloyed ingot prices remain rangebound in Delhi NCR, Chennai

Prices of aluminium (non-OEM ) ADC12 alloyed ingots saw a slight increase in north India, while prices remained stable in the south. This was mainly attributed to continued sluggish demand in the automotive sector and a significantly weakened export market.

Prices of OEM approved ADC12 prices for December settlements were at INR 209,000/t ex Delhi and INR 208,000/t ex Chennai, as per last assessments by BigMint.

BigMint's weekly assessments for ADC12 (non-OEM) grade stood at INR 202,000/t up by INR 1000/t in Delhi and INR 203,000/t in Chennai, stable w-o-w.

At the time of reporting, three-month aluminium futures on the LME stood at $2,591/t, down 2% compared to the previous week's levels of around $2,650/t.

The current scrap to semi-finished spread stood at INR 29,000-30,000/t for non-OEM grades.

Market insight

Reports suggest that a major automaker's ADC12 price for January 2025 might get settled at INR 208/kg, though an official notification is awaited. This development is expected to drag down ADC12 prices for 30-day credit terms below INR 207/kg. Alloyed ingot manufacturers are already facing slim profit margins, and any further drop in semi-finished product prices could severely impact their financials. Additionally, major automobile manufacturers are scheduled for maintenance shutdowns, likely resuming operations only after the New Year, further dampening demand.

The import market remains weak, with buyers avoiding imported material due to comparable or lower prices for domestic alternatives. Meanwhile, inquiries from Japan have shown slight improvement, though significant domestic demand recovery in Japan for ADC12 is expected only after January.

UAE suppliers are offering ADC12 to Japanese buyers at $2,480-2,500/t. Offer levels for ADC12 to Japan have increased, largely due to higher premium offers from global primary producers for Q1 2025. While inquiries from Japan have slightly improved, domestic demand for ADC12 in Japan is expected to gain momentum after January. Japanese buyers are being offered ADC12 at $2,380-2,420/t from the UAE and India.

Import market sluggish

The import market has been sluggish, with buyers showing little interest in purchasing imported material due to the lack of demand. Meanwhile, domestic material is either cheaper or priced at par with imported alternatives, making it a more attractive option.

A source told BigMint, "Several major automobile manufacturing companies will be undergoing maintenance shutdowns and are expected to resume operations after the New Year."

Domestic scrap tags rise

In the domestic market, Tense scrap prices were up slightly by INR 1,000/t in both Delhi and Chennai, while other grades also witnessed an uptrend. According to BigMint's assessment, domestic Tense scrap stood at INR 174,000/t ex-Delhi-NCR and INR 175,000/t ex-Chennai.

China's silicon prices edge down

According to BigMint's assessment, prices of China's 553-grade silicon dropped by $50/t w-o-w to $1,680/t CFR Mundra. Freights were at around $2,000-2,300 for a single container from China to Mundra.

Outlook

The aluminium market is experiencing significant uncertainty. However, a recovery in both the imported and domestic markets is anticipated once auto companies resume operations after their maintenance shutdowns. Until then, the market is expected to remain range-bound, with participants adopting a wait-and-watch approach.