Aluminium ADC12 alloy ingot automobile equivalent spot prices rose by INR 7,000/t w-o-w to INR 197,000/t. This uptick is largely attributed to the surge in both local and imported tense scrap prices as per BigMint’s assessment.
India’s largest automobile manufacturer and the price settler in the domestic aluminium alloy ingot space, announced its monthly aluminium alloy ingot ADC12 settlement prices at INR 199,500/t for February 2024, up by INR 8,500/t m-o-m. Prices have risen to a five-month high since September 2023, data maintained by BigMint revealed.
In the North Indian market, the shortage of raw materials, specifically Tense scrap, has led to elevated prices, with Tense scrap currently priced at INR 164,000/t at maximum level, exy Delhi, excluding GST.
Shifting the focus to the raw materials scenario in Chennai, there is a notable scarcity, and present offers range from 161,000-162,000/t, exy Chennai, excluding GST, reliable sources shared with BigMint.
A small-medium scale aluminium alloy ingot manufacturer mentioned that “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”.
“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 reported by a broker.
Casting scrap availability locally is constrained due to improved procurement and delays in import shipments, particularly affecting the northern region market, BigMint understands.
In the western region, casting scrap is priced at INR 164,000-165,000/t. ADC12 ingot makers are offering rates of around INR 200,000-202,000/t, while ADC6 stands at approximately INR 219,000-220,000/t, with credit payment terms, exw Ahmedabad, excluding GST.
The current spread between tense and ADC12 stood at around INR 34,000/t exw Delhi. Imported tense scrap prices from the Middle East, particularly from the UAE, rose by $60/t to $1,720/t yesterday. Tense (6-7%) from the US was heard at $1,775/t, up by $35/t. The price for Zorba 95-5 from the UK stood at $1,985/t, up $15/t w-o-w. Indicative offers of ADC12 for Japan were heard at 2,330-2,350/t recently.
However, three-month futures for aluminium were currently at $2,265/t, reflecting a weekly increase of approximately $30-40/t.
The crucial raw material, Silicon 553 grade, is currently traded at INR 195,000/t with credit payment terms. The immediate payment price stands at INR 192,500-193,000/t, exw Delhi, excluding GST.
Additionally, the price of Silicon 553 of Chinese origin has decreased by $30/t, w-o-w to $2,110/t, CIF WC India as per the latest price assessment.
Outlook
The near-term market outlook appears to be favourable, driven by factors such as limited material availability in the domestic market and potential delays in shipments of imported raw materials due to the Red Sea issue, boosting market sentiment.
Additionally, the resumption of overseas buying inquiries for aluminium alloy ingots from international markets and the evolving prices of imported materials may contribute to a positive trend in pricing.
