India's ADC12 alloy market showed recovery in February 2025, as India's largest automaker announced March 2025 settlement prices for ADC12, which saw an increase by INR 4,210/tonne and was at INR 212,110/tonne, as demand improved and prices rose for the first time in nine months.
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BigMint's latest assessment in Feb'25 shows that OEM-approved ADC12 in Delhi was at INR 210,000/tonne (t) and in Chennai was at INR 209,000/tonne, an increase of up to INR 2,000/tonne m-o-m.
BigMint's assessment of tense in Delhi was at INR 177,000/tonne, a rise of INR 2,500/tonne, and Chennai was at 178,000/tonne, a rise of INR 3,500/tonne m-o-m.
This rise reflects improved demand from the automotive sector, though major players kept prices lower for ADC12. Automakers' ADC12 prices for February settlements stood at INR 207,900/tonne, down INR 100/t from January 2025.
While India's largest automaker reduced prices in February 2025, this had minimal effect on the local tags of ADC12 and raw materials, which remained either stable m-o-m or marginally on the higher side. While the gap between scrap and ADC12 narrowed over the last few months of CY'24, it was firm in February 2025 at INR 33,000-34,000/tonne.
Scrap, ingot imports increase
Aluminium scrap imports increased m-o-m to 155,977 tonnes in January 2025. Zorba imports increased 19 per cent m-o-m to 33,220 tonnes, while Taint Tabor was up by 7 per cent m-o-m to 36,128 tonnes.
Similarly, semi-finished ingot imports with key grades increased 17 per cent m-o-m for A356, while LM24 experienced notable declines.
ADC12 imports surged m-o-m, from 177 tonnes to 500 tonnes in January 2025.
Export market
Indian export offers for ADC12 increased m-o-m in February 2025 to $2,400-2,420/tonne CFR Japan despite limited market traction. This rise was driven by improved automotive demand and a shortage of basic raw materials for ingot production in February in Indian markets.
Japan's imports of secondary aluminium alloyed ingots (ADC12) remained largely stable in January at 99,937 t compared to the previous month, with the UAE and China maintaining their positions as the top two suppliers.
Japan's domestic car production rose in January, marking the first y-o-y growth in six months, despite challenges from the new US tariffs on automobile imports. According to data from eight major producers, total passenger car output climbed by 18 per cent y-o-y to 642,966 units.
Imported aluminium scrap prices increased slightly in February 2025, driven by a marginal uptrend in futures. For instance, US-origin Tense scrap inched up by $40/tonne to $1,870-1,880/tonne, while UK-origin Wheels rose by $10-20/tonne to $2,450/tonne. Meanwhile, the London Metal Exchange (LME) aluminium prices increased by 2 per cent m-o-m in three months.
Market scenario - scrap demand expected to pick up further
Domestic ADC12 offers were up by up to INR 215,000-218,000/tonne as local scrap prices increased due to a supply shortage.
A source stated, "In northern and southern India, participants expect scrap demand to rise further."
Another source highlighted, "Scrap demand typically picks up mid-year, which could lead to shortages given its higher usage currently. Additionally, several countries are planning to restrict scrap exports, further impacting supply. In response to rising primary ingot premiums, A356 manufacturers have started using scrap instead. Scrap shortages are expected to push prices even higher in the next quarter."
Chennai's prices of local A356 stood at INR 260,000-262,000/t for 30 days credit, while domestic Wheels tags were at INR 235,000/t.
A source noted, "India's largest automaker kept ADC12 March 2025 settlement prices at 212,110/t. However, OEMs in the north and south have started quoting prices of INR 215,000-216,000/tonne, owing to the shortage of raw material in the market currently."
Maruti Suzuki's sales in Feb'25
In February 2025, Maruti Suzuki India Limited reported total sales of 199,400 units. This included 163,501 units sold in the domestic market, 10,878 units supplied to other OEMs, and 25,021 units exported.
Segment-wise performance
Outlook - prices likely to rise in the short term
The ADC12 alloy market is expected to strengthen in the near term, driven by a shortage of basic raw materials and an anticipated recovery in overseas demand. Tight supply and rising input costs, along with a narrower spread between scrap and semi-finished products than what was seen last month, could push prices higher in the coming weeks.
In January 2025, India's automobile retail sector experienced an upturn, with overall sales increasing by 6.6 per cent y-o-y, according to the Federation of Automobile Dealers Associations (FADA). FADA President C.S. Vigneshwar noted that the auto retail sector began 2025 on a promising note, with all categories showing positive momentum, indicating sustained consumer confidence and a steady market recovery.
The association also emphasised the need for OEMs to align supplies with market demand to prevent inventory buildup and support a sustainable sales environment.
Looking ahead, the introduction of new vehicle models, including electric vehicles, is expected to stimulate demand in 2025.
Image credit: IndiaMart
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