India's aluminium ADC12 prices gain w-o-w amid escalating raw material costs
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Aluminium ADC12 alloy ingot automobile equivalent spot prices rose by INR 2,000/t w-o-w to INR 204,000/t. This increase is primarily attributed to the uptick in local tense scrap prices, as per BigMint's assessment.
India's leading automobile manufacturer, influential in setting prices within the domestic aluminum alloy ingot market, disclosed its monthly settlement prices for aluminum alloy ingot ADC12 at INR 207,400/t for March 2024.
This marks an increase of INR 7,900/t m-o-m and represents the highest level in ten months since May 2023, according to data compiled by BigMint.
In the North Indian market, a shortage of raw materials, particularly tense scrap, has led to a spike in prices, reaching INR 172,500/t exy-Delhi, excluding GST. Taking advantage of the current market scenario, some sellers are even quoting prices exceeding INR 174,000/t in the Delhi region.
Turning attention to the raw materials situation in Chennai, there is a significant shortage, with current offers ranging between INR 171,000 and INR 172,000/t ex-Chennai, excluding GST, according to reliable sources informed BigMint. Furthermore, the spot price for ADC12 in Chennai is currently at levels of INR 204,000-205,000/t ex-works, excluding GST.
On the other hand, another source informed us, that some small-scale ADC12 manufacturers are looking for multiple options such as Taint Tabor with some additions along with high impurities of Tense and Trump, to produce ADC12. However, this strategy is encountering specific difficulties.
Currently, the price difference between Tense scrap and ADC12 stands at INR 31,500/t. However, known mills are now shifting towards a gap of around INR 35,000/t, following the previous trend.
Imported market trends
Imported Tense scrap prices from the Middle East, specifically from the UAE, decreased by $25/t to $1,695/t this week, following several weeks of consecutive price increases. Tense scrap (6-7%) from the US was reportedly at $1,775/t, down by $15/t. On the other hand, the price for UK-origin Zorba 95-5 rose to $2,010/t CFR Nhava Sheva, marking an increase of $50/t, as per the recent scheduled prices assessment by BigMint.
However, three-month futures for aluminum were presently at $2,247/t, slightly higher compared to the previous week. Prices for China-origin silicon 553 remained stable at around $2,030/t CIF Mundra, as the Chinese market had recently resumed activity following the Lunar New Year holidays.
Domestic market
In the domestic space, scarcity of raw materials, particularly tense scrap, has kept prices on the higher side. Tense scrap prices are at INR 172,500/t, exy-Delhi (excluding GST).
Outlook
Near-term prices of ADC12 prices might escalate due to scarcity of raw materials in the domestic market along with prospective price hikes by major automobile companies are the major factors to support upcoming price trends.