India's aluminium ADC12 alloy ingot prices continue to decline in the face of weak demand

The recent dynamics in the Indian market for aluminium ADC12 alloy ingots and scrap metals have resulted in numerous notable developments. This week, the price of ADC12 alloy has stayed steady at INR 184,000 per tonne. Concurrently, the price of tense scrap in the Delhi market has remained steady, at INR 155,000 per tonne exw Delhi. The price stability of tense scrap can be attributed to the market's low demand and adequate supply. This supply and demand balance has kept the tense scrap price around INR 155,000 per tonne.

Maruti Suzuki India Limited (MSIL), an esteemed company in the automotive industry, recently decreased its monthly settlement price for ADC12 by INR 7,250 per tonne on a month-to-month (m-o-m) basis. As a result of this price adjustment, ADC12 prices have reached a 10-month low, falling to INR 190,000 per tonne in November. The revelation of this lower price level of INR 190,000 per metric tonne has significantly influenced the market, prompting significant uproar and alarm among industry participants. MSIL's move has sent shockwaves throughout the market, bringing attention to the quickly shifting dynamics and implications for the industry.

India's conscious shift to recycled aluminium amplifies 1Q2023 scrap imports by 194 per cent from the US. In March 2023, India imported 36,400 tonnes of aluminium scrap from the United States compared to 31,000 tonnes in February, according to the US Census Bureau data. The global aluminium recycling market continues to witness robust demand driven by sustainability efforts and the increasing emphasis on reducing environmental impact. For a deeper exploration of the subject and to access further information, consider reviewing AL Circle's specialized report titled "World Recycled Aluminium Market Analysis - Industry Forecast to 2026." 

According to an industry insider, "There is no price gap in the market between Maruti and other players. Even manufacturing costs are higher. Mills will sustain heavy losses if this price reduction continues in the coming month. The ADC12 to Tense price spread has contracted to INR 35/kg, which is at the lowest level ever."

Offer prices for ADC12 in several spot markets have been reported to range between INR 181,000 and INR 185,000 per tonne. The specific price within this range is determined by the qualities of the material, including its quality and quantity. These price variations represent the numerous alternatives available to purchasers, allowing them to adapt their purchases to their unique needs and tastes.

As per information provided by a supplier based in Delhi: "Fewer deals are happening in the ADC12 market right now. People are careful and watch the two-wheeler market to see if it will pick up like the four-wheeler market. Buyers have started quoting prices at the Tense + INR 25 levels."

Furthermore, it is vital to highlight that the export market for ADC12 currently needs to grow due to lower price offers. ADC12 export prices are now in the $2,220 to $2,230 per tonne range for shipments to Major Japanese Ports (MJP). These prices reflect the current international market issues, where low pricing circumstances have hindered significant export deals.

Compared to the previous closing session, India's aluminium scrap market has shown consistency, with the price for Tense scrap exw-Delhi holding unchanged at INR 155,000 per tonne. While trades have occurred between INR 154,000 to INR 157,500 per tonne, utensil scrap values have been seen at INR 170,000 to INR 171,000 per tonne ex-Delhi without GST. Market participants have stated that their key concerns are a lack of capital and slow domestic demand. Furthermore, the market's anxiety is heightened by global geopolitical concerns, emphasizing the industry's complexities. The current situation of the aluminium scrap industry in India is characterized by price stability and the different problems market participants face.

It's anticipated that alloy prices will adjust in the next weeks as a result of lower market liquidity and ongoing global concerns.

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