- Q4 MJP outlook remains supported by tight supply
- BALCO’s record bauxite bid signals resource race
Domestic aluminium prices in India strengthened w-o-w, supported by firmer MCX and LME aluminium trends, which lifted sentiment in the physical market.
According to BigMint’s assessment, P1020 aluminium ingot prices in Delhi NCR increased by INR 12,000/t (3.5%) w-o-w to INR 357,000/t, from INR 345,000/t a week earlier.
How did Indian and global exchanges perform?
Domestic aluminium futures on the MCX increased by INR 6,860/t (2%) w-o-w to INR 349,500/t, from INR 342,640/t in the previous week.
Meanwhile, three-month aluminium prices on the LME rose by $96/t (3%) w-o-w to $3,270/t, from $3,174/t. At the same time, LME aluminium inventories declined by 6,900 t (3%) to 259,400 t, indicating continued tightness in exchange stocks.
Market updates
The domestic aluminium market strengthened during the week, supported by firmer MCX and LME prices alongside a further decline in LME inventories. Rising domestic and global benchmark prices, coupled with continued drawdowns in exchange stocks, reflected tighter metal availability and improved market sentiment.
However, demand remained subdued as the ongoing monsoon season continued to weigh on consumption across key end-user sectors. Most buyers restricted purchases to immediate requirements, with limited interest in inventory building despite the recent uptrend in domestic and global aluminium prices. Domestic aluminium premiums remained steady at around $330/t, indicating stable physical market conditions.
The Q4 MJP premium is expected to settle in the range of $350-370/t. A sharp correction is considered unlikely due to the continued tight availability of quality Western-origin aluminium. With Japanese spot premiums currently hovering around $300-330/t, the quarterly settlement is expected to remain below $395/t.
Additionally, Bharat Aluminium Company Ltd (BALCO), a Vedanta Group company, has emerged as the successful bidder for Odisha’s Karlapat bauxite block, quoting a record 175% premium, according to market sources. Located in Kalahandi district, the block contains over 200 million tonnes (mnt) of bauxite across 3,100 hectares, making it the largest virgin bauxite resource currently offered in the state.
The auction attracted strong participation from major industry players, including Adani Enterprises, Reliance Industries, Hindalco Industries, Vedanta Aluminium, Powermec, and Coal India, with Adani Enterprises and Vedanta Aluminium reportedly competing aggressively in the final bidding rounds.
The winning bid is the highest premium recorded in BigMint’s historical auction database, surpassing the previous record of 126.76% for Odisha’s Kutrumali bauxite block in 2023. The outcome highlights the increasing strategic importance of securing domestic bauxite resources as India’s aluminium industry expands to meet rising demand from infrastructure, renewable energy, electric vehicles, transport, packaging, and defence sectors.
Outlook
Domestic aluminium prices are expected to remain firm in the near term, supported by stronger MCX and LME trends, declining LME inventories, and stable domestic premiums. However, subdued demand during the monsoon season is likely to limit any sharp upside. Market participants will closely monitor the Q4 MJP premium settlement and developments in raw material availability, particularly following BALCO’s acquisition of the Karlapat bauxite block, which underscores the increasing focus on long-term resource security.
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