What happened in the secondary aluminium industry in October 2024? BigMint analysis
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The ADC12 alloy market has entered a challenging phase as demand softens and prices hit their lowest levels in nine months. BigMint's recent assessment shows that OEM-approved ADC12 in Delhi and Chennai is priced at INR 209,000/t and INR 210,000/t, respectively, a monthly decrease of up to INR 6,000/t. This decline reflects weaker demand from the automotive sector, particularly as major players have announced price cuts for ADC12. For November settlements, ADC12 prices stand at INR 209,900/t, down INR 6,000/t from October 2024.
In November, the largest automaker significantly reduced prices, but this has had little effect on the prices of ADC12 and raw materials. The gap between scrap and ADC12 has narrowed, which has led to a decline in alloy ingot makers' profit margins, dropping from INR 33,000-34,000/t to around INR 29,000/t recently.
Aluminum scrap prices remain mixed across grades. For instance, US-origin Tense scrap declined 2.5% to $1,852/t, while UK-origin wheels scrap rose by 3.2% to $2,454/t. Meanwhile, LME three-month aluminum prices increased by 5.4% month-on-month, driven by alumina supply constraints due to bauxite shortages in Australia and Guinea.
Imported ADC12 offers, such as UAE-origin material priced at $2,380-2,390/t CFR Mundra, are also seeing limited traction due to more attractive domestic pricing.
Scrap and ingot imports: Domestic reliance grows
Aluminum scrap imports remained stable at 158,000 t in September, though specific grades fluctuated. Zorba imports fell 18% to 35,940 t, while Taint Tabor rose by 8% to 33,422 t. Similarly, semi-finished ingot imports dropped 9.3%, with key grades like A356 and LM24 experiencing notable declines.
ADC12 imports remained relatively stable, with a slight increase of 0.5%, going from 2,089 t to 2,100 t in Spet'24, while exports was almost nil during this period.
The domestic market has seen an oversupply of ADC12 alloyed ingots, especially as overseas demand, India's largest market being Japan- remains weak. Local suppliers have increasingly turned to domestic scrap due to high costs of imported materials. This shift, combined with subdued export demand, has led to an excess of ADC12 ingots in the Indian market.
