India’ADC12 aluminium ingot price declines m-o-m amid weakening scrap market

Aluminium ADC12 prices were recorded at INR 219,000 per tonne ex Delhi, a decrease of INR 2,000 per tonne m-o-m, as per BigMint assessment. In Chennai, prices were recorded at INR 218,000 per tonne, a drop of INR 1,000 per tonne m-o-m. However, bids are INR 3,000-4,000 per tonne lower. Better availability and a drop in scrap prices have decreased the price of ADC12 alloyed ingots.

Meanwhile, spot prices of aluminium ADC12 alloyed ingots (non-OEM) in Delhi NCR and Chennai remain firm, per the latest assessment. In the Delhi-NCR region, ADC12 spot prices were assessed at INR 209,000 per tonne ex-Delhi, aligning with domestic tense scrap prices, which settled at INR 174,000 per tonne. Bids are at INR 165,000-170,000 per tonne ex-Delhi.

Likewise, Chennai's ADC12 prices were reported at INR 211,000 per tonne on an immediate payment basis, excluding GST. At the same time, casting scrap prices were at INR 176,000 per tonne ex-Chennai. The current spread between tense and ADC12 spot price levels is at INR 33,000-34,000 per tonne, widening by INR 3,000-4,000 per tonne from previous levels of 29,000-30,000 per tonne.

LME and imported price trend

Three-month LME aluminium prices hovered at $2,260-2,265 per tonne and fell 1 per cent w-o-w. Stocks at LME-registered warehouses stood at 918,000 tonne. Aluminium prices are still hovering at multi-month lows.

Tense scrap from the Middle East, particularly the UAE, decreased by $30 per tonne, settling at $1,700 per tonne. Zorba 95/5 from the UK decreased by $15 per tonne to $1,960 per tonne CFR West Coast, India.

A credible seller source stated, "We are supplying smaller quantities to our regular buyers while we restock. Our strategy is to release the inventory at higher prices after the monsoon season to achieve profit margins."

A buyer stated, "We have stocked up in advance and do not need more for at least a month. Right now, we are only making need-based purchases in small quantities."

A trader stated that large-scale sellers are offering material at rates in sync with a major automobile company; however, given weak market sentiments, INR 1,000-2,000 per tonne discounts were heard offered.

Domestic scrap market

In the domestic market, tense scrap prices have decreased w-o-w by INR 1,000 per tonne in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 174,000 per tonne ex-Delhi NCR and INR 175,000 per tonne ex-Chennai. This decline aligns with falling LME aluminium prices and sluggish market trends.

India's imports of scrap, alloyed aluminium ingots

Imports of aluminium scrap, a key raw material for manufacturing alloyed ingots, saw a notable 8% drop in the first half of the calendar year 2024 (H1CY'24) to around 809,100 tonnes from 875,000 tonne in H1CY'23. India's imports of alloyed aluminium ingots surged 60 per cent to around 112,158 tonne in H1CY'24. Volumes in the same period of 2023 were 70,780 tonne.

China's silicon market

The drop in China's silicon 553 prices by $30 per tonne to $1,760 per tonne CFR Mundra has had a significant impact on the market, particularly on buying interest. This, combined with easing freight rates, has led to a decrease in buying interest, especially among major aluminium alloy manufacturers who already have sufficient silicon supplies. The freight rate from China to Mundra was also heard at $2,100-$2,200/20-foot container.

Imported Offers

• ADC12, Malaysia: CFR Chennai at $2460-2500/t.
   
• ADC12, UAE: CFR Mundra at $2300-2330/t.
   
• ADC12, UAE: CFR Japan at $2350-2380/t (offers), bids are as low as $2200-2250/t.Special Alloys (Indicative)
   
• LM24: 216-220/kg ex Chennai
   
• A356: 230-233/kg ex Chennai
   
• LM24, UAE: CFR Mundra at $2440-2460/t, A356, UAE: CFR Mundra at $2530-2550/t
   

Outlook

The market is expected to remain sluggish due to uncertainty around LME prices and multiple holidays, including the long weekend coinciding with Independence Day and Janmashtami, involving extended holidays. However, after the holidays, prices may show a positive trend.

Received under the content exchange agreement with SteelMint