The spot prices for Aluminium ADC12 alloy ingot (equivalent to automobile grade) in Delhi remain steady at INR 204,000 per tonne week-on-week, excluding GST. This stability persists despite the rise in local Tense scrap prices, especially in regions like north and south India, where shortages have been noted.
Market dynamics: Insights from participants
In Chennai, current offers for Tense scrap range between INR 172,000 and INR 173,000 per tonne. However, bids are being placed in INR 170,000 to INR 171,000 per tonne. Meanwhile, the spot price for ADC12 in Chennai is reported at INR 208,000 to INR 210,000 per tonne ex-warehouse.
Despite the tight availability of Tense scrap, ADC12 prices have remained relatively stable throughout the week. This shortage is affecting the northern region's capacity utilization rates of certain mid-scale manufacturers.
"We are still worried about getting enough Tense scrap, So we are being careful about future bookings of ADC12. We are sticking to monthly or quarterly contracts and checking our raw material stocks and upcoming deliveries before accepting new orders for ADC12", stated an aluminium alloy manufacturer.
Industry participants anticipate that settlement prices for ADC12 with major automobile manufacturers in India will likely stay steady in April. There are mixed expectations, with some foreseeing possible adjustments in March prices while others anticipate potential increases in April.
The reference price for A356 alloy ingot is approximately INR 215,000 to INR 217,000 per tonne with immediate payment terms, ex-warehouse Delhi. In the western region, reference prices range around INR 218,000 to INR 220,000 per tonne, ex-warehouse Gujarat, with a credit payment term, excluding GST.
Non-automotive buyers need help procuring ADC12 due to its limited availability in the market. Additionally, bookings made for imported materials during January-February 2024 are yet to be fulfilled, with expected delivery around May. This delay raises concerns about a potential shortage in March, which could lead to further price increases, as stated by an ADC12 producer based in south India.
However, as the day progressed, there were reports of rationalization and normalization in the market. Scrap and semi-finished prices were observed trading at INR 1,000 to INR 2,000 per tonne premiums in the domestic market. Sources in north India have reported that Tense material is currently traded at premiums, approximately INR 176,000 per tonne ex-Delhi.
Pricing trend
Yesterday's assessment revealed an increase in imported Tense scrap prices from the Middle East, particularly from the UAE, which rose by $55 per tonne to $1,750 per tonne. Tense scrap (6-7%) from the US was reported at $1,825 per tonne, marking a $25 per tonne increase. Zorba, 95-5 from the UK, stood at $2,025 per tonne CFR Nhava Sheva.
Meanwhile, three-month futures for aluminium were holding steady at $2,183 per tonne, reflecting a range-bound level week-on-week. China-origin silicon 553 prices were reported at approximately $2,030 per tonne CIF Mundra, showing stability week-on-week.
Domestic market
In the domestic space, scarcity of raw materials, particularly Tense scrap, has kept prices higher. Tense scrap prices are INR 173,500/t, while taint tabor prices are INR 171,500/t exy-Delhi (excluding GST).
Outlook
Limited availability of tense scrap in the domestic market, delayed imported consignments, and a price hike by a major automobile company is expected to drive domestic ADC12 prices upward in the near term.
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