India: Aluminium ADC12 ingot prices remain stable despite Maruti’s upward revision

Maruti Suzuki India Limited (MSIL), India’s largest car manufacturer and consumer of aluminium, has released its March 2023 monthly settlement prices for aluminium ADC12 alloy ingots at INR 212,400/t, up INR 4,800/t m-o-m. February 2023 monthly settlement price was INR 207,600/t.

Importantly, the ADC12 prices from Maruti Suzuki are the standard for determining domestic aluminium price trends. MSIL consumes a monthly average of 7,500-10,000 t of ADC12 automotive alloy ingot, making it the largest user in the industry.

ADC12 spot market prices have been declining in recent weeks. Domestic market participants reported that limited demand continues to have an impact on sentiment. The impact of low demand was also felt in key aluminium scrap markets such as tense and zorba. MSIL prices will benefit OEM-approved producers and have a positive impact on production in the coming months.

According to SteelMint’s assessment, ADC12 prices remained stable at INR 195,000/t (2,360$/t) exw Faridabad (excluding GST) amid mixed sentiments following Maruti’s announcement.

On the raw material front, a few sellers and/or exporters based in the Middle East and the United Kingdom stated that raw material prices may not fall significantly due to adequate future bookings for exports and limited selling pressure.

• Until yesterday, US-origin aluminium tense scrap prices were hovering around $1,740/t CFR Nhava Sheva, while domestic tense prices were around INR 161,000/t ($1,948/t) ex-Delhi.
• SteelMint’s price assessment for UK-origin Zorba 95-5 is $1,910/t CFR Nhava Sheva.

Three-month aluminium futures and spot prices on the LME fell by $121/t to $2,333/t in March (till March 22) when compared to the previous month’s average assessment price. Aluminum stocks in warehouses were estimated to be 547,732 t, up from 520,633 t in February.

Automotive industry

In February, India produced 291,928 passenger vehicles, an increase of 6,165 units from the previous month’s total of 298,093 units. ADC12 is used majorly in automobile application.

Since November 2022, MSIL’s monthly settlement prices for ADC12 have been rising. OEM-approved producers are optimistic that, in the face of high raw material costs and low demand, MSIL’s recent price increase will help the industry in the coming months.