BigMint’s assessment of spot prices of aluminium ADC12 alloy ingot saw a rise of INR 3,000/tonne (t) to INR 215,000/t w-o-w exw-Delhi NCR. Notably, tense scrap prices were at INR 188,000/t ex-Delhi, marking a weekly increase of 2.7%.
Market sources indicated that tense offers in Chennai are hovering at INR 186,000/t-187,000, with spot prices of ADC12 in Chennai ranging between INR 218,000-INR 220,000/t exw on immediate terms, excluding GST.
Moreover, a major automobile company recently increased aluminium alloy ADC12 prices by INR 3,950/t to INR 221,750/t for June 2024, supporting positive sentiments in domestic scrap prices.
The scrap-to-ADC12 spread was recorded at INR 27,000-28,000/t.
Market dynamics amid cash flow challenges
The aluminium semi-finished market is facing notable bid-offer disparities, despite the latest price announcement from the major price setter. This issue stems primarily from ongoing cash flow challenges, prompting many market participants to adopt a wait-and-see approach.
Impact of northern tense price rise, election phase
The rise in raw material prices in the northern region has significantly affected the prices of semi-finished products. However, the election phase has led to a sluggish trend in purchasing inquiries for ADC12. A seller explained, “Small furnaces in the north are struggling with a liquidity crunch due to the ongoing elections, forcing them to sell at lower rates. In contrast, large furnaces and contract deals for tense, extrusion, and TT are commanding premiums.”
An alloy producer noted, “ADC12 manufacturers have produced material at higher rates and are holding onto it, waiting for bids to rise, likely after the elections.” Currently, demand is somewhat lower, and cash flow has been impacted due to the election.
Regional insights, import trends
A local manufacturer in Chennai reported that the southern region, particularly Chennai, is seeing substantial ADC12 exports this month, especially from Malaysia and Indonesia. Buyers in Chennai are purchasing ADC12 from Malaysia at $2,580/t CFR, with about 300 t acquired at these price levels.
According to BigMint’s assessment, taint tabor (USA, HRB-3%) rose by $30/tonne (t) to $2,040/t. Tense scrap from the US remained stable at $1,960/t. The primary driver was the w-o-w increase in LME aluminium prices.
China’s silicon market
According to BigMint, prices of China’s silicon 553 have increased by $80/t, reaching $1,980/t CFR Mundra, mainly due to surged freight rates and China silicon 441 is at $1,990-2,000/t. The local price of silicon for a 30-day credit term is INR 185,000/t in Delhi.
Recent deals
EU origin taint tabor 1-2% was traded at $2215/t To CIF Mundra.
Aluminium extrusion traded at INR 195,000/t Ex Haryana.
Sold ADC12 at INR 215/kg, ex Chennai.
Bought tense at INR 185,000/t, ex Chennai.
Bought silicon 553 at $1,960/t, CFR Chennai.
Hong Kong wheels traded at $2,490/t, CFR Chennai.
Outlook
It is expected that prices will remain range-bound in the near term. The market is expected to fully absorb the price announcement by the major automobile price setter only after the elections.