Aluminium ADC12 alloy ingot spot prices for automobiles increased by INR 7,000 per tonne W-o-W, reaching INR 197,000 per tonne. This surge is primarily attributed to the rise in local and imported Tense scrap prices, per sources.
The largest automobile manufacturer in India, which also sets the price benchmark in the domestic aluminium alloy ingot market, declared a monthly settlement price of INR 199,500 per tonne for ADC12 in February 2024. This marks an increase of INR 8,500 per tonne month-on-month and represents the highest prices in five months, based on data compiled by BigMint since September 2023.
"We have secured future bookings up to a certain timeframe and are currently not taking new orders. This decision is attributed to a severe shortage of the raw material, namely casting scrap," said sources.
In the North Indian market, a shortage of raw materials, specifically Tense scrap, has increased prices. In Delhi, tense scrap is priced at a maximum level of INR 164,000 per tonne, excluding GST.
Raw material situation in Chennai
Shifting attention to the raw materials situation in Chennai, there is a noticeable scarcity, and current offers range from INR 161,000 to 162,000 per tonne, excluding GST, as shared by reliable sources.
"Conversion spreads have increased by INR 2,000-3,000/t, supported by buying inquiries that have risen positive sentiments. This improvement also considered the capacity utilization rate", as said by sources.
Local constraints on casting scrap availability have arisen due to improved procurement and delays in import shipments, particularly impacting the northern region market. In the western region, casting scrap is priced between INR 164,000 and 165,000 per tonne. ADC12 ingot manufacturers offer rates ranging from approximately INR 200,000 to 202,000 per tonne, while ADC6 is priced at around INR 219,000 to 220,000 per tonne, with credit payment terms, exw Ahmedabad, excluding GST.
The current spread between tense and ADC12 is approximately INR 34,000 per tonne exw Delhi. Imported tense scrap prices from the Middle East, particularly from the UAE, increased by $60 per tonne to $1,720 per tonne recently. Tense (6-7 per cent) from the US was reported at $1,775 per tonne, up by $35 per tonne.
Price for Zobra
The price for Zorba 95-5 from the UK stood at $1,985 per tonne, reflecting a weekly increase of $15 per tonne. Indicative offers for ADC12 from Japan were heard at 2,330-2,350 per tonne recently. However, three-month futures for aluminium are currently at $2,265 per tonne, showing a weekly increase of approximately $30-40 per tonne.
The crucial raw material, Silicon 553 grade, is traded at INR 195,000 per tonne with credit payment terms. The immediate payment price is INR 192,500 to 193,000 per tonne, exw Delhi, excluding GST. In addition, the cost of Silicon 553 of Chinese origin has decreased by $30 per tonne week-on-week, reaching $2,110 per tonne, CIF WC India, as per the latest price assessment.
Short-term market outlook
The short-term market outlook seems promising, buoyed by factors like restricted material availability in the domestic market and potential delays in shipments of imported raw materials due to the Red Sea issue, thereby enhancing market sentiment. Furthermore, the revival of overseas buying inquiries for aluminium alloy ingots from international markets and the dynamic pricing of imported materials may contribute to a positive trend in pricing.
Received under the content exchange agreement with SteelMint
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