- Lower scrap costs pressure ADC12 alloy prices
- Comfortable OEM inventories limit fresh procurement activity
India’s ADC12 aluminium alloy ingot prices declined further m-o-m in August 2026, following the sharp correction in the leading automaker’s settlement price, as weaker LME aluminium prices, lower scrap costs, ample domestic availability, comfortable OEM inventories, subdued spot buying, and rising inflows of competitively priced duty-free ADC12 imports continued to weigh on market sentiment. The correction was more pronounced in southern India, where FTA-origin material remained readily available.
Despite the price decline, demand from the automotive sector remained relatively stable, while buyers stayed cautious amid comfortable inventories. The spread between aluminium scrap and ADC12 alloy ingots narrowed further to around INR 68,000-76,500/t in Delhi NCR and Chennai, primarily reflecting the sharper correction in ADC12 alloy ingot prices alongside continued weakness in aluminium scrap values.
Market insights
ADC12 alloy ingot prices fell across major Indian markets amid softer raw material costs. Prices stood at:
- Chennai: INR 310,000-312,000/t
- Delhi: INR 320,000-323,000/t
- Pune: INR 318,000-320,000/t
Overall, India’s ADC12 aluminium alloy market has corrected sharply following the leading automaker’s August settlement, with prices now heard at INR 320,000-323,000/t in Delhi, INR 318,000-320,000/t in Pune, and INR 310,000-315,000/t in Chennai. Southern India has witnessed a steeper correction amid subdued ADC12 demand, lower tense scrap prices, and increased availability of competitively priced imports.
Chennai has seen significant price volatility, with some suppliers previously offering material at around INR 310,000/t to liquidate stocks, although such offers have largely stopped since last weekend. Buyers are currently receiving offers around INR 320,000/t while negotiating towards INR 310,000/t. The sharp decline in domestic prices has adversely affected the competitiveness of imported ADC12, while surplus inventories and ample material availability continue to weigh on buying sentiment.
Most OEMs are understood to be carrying comfortable inventories, reducing the urgency for fresh procurement and keeping spot buying activity subdued. Import bookings have also slowed as the correction in domestic prices has narrowed import arbitrage, while previously booked cargoes continue to arrive in India.
In contrast, the northern market remains relatively better supported by tighter availability of tense and aluminium wheel scrap, although overall demand remains weak. With buyers adopting cautious procurement strategies and limiting purchases to immediate requirements, ADC12 prices remain under pressure despite healthy automobile-sector demand.
However, the medium-term outlook remains cautiously positive, with market participants closely monitoring the European Union’s proposed 15% export duty on aluminium scrap, expected to be announced in September, as well as the UAE government’s decision on whether to extend its aluminium scrap export ban beyond October 2026. Any further tightening of global scrap availability could support aluminium scrap prices and subsequently provide renewed upside potential for India’s ADC12 alloy market in the coming months.
Alloy imports surge y-o-y in H1CY’26
Imports: India’s ADC12 alloy ingot imports surged 637% y-o-y during H1CY’26 to 6,646 t, compared with 901 t in H1CY’25. The sharp increase was primarily driven by the widening price gap between domestic and imported material, prompting buyers to source competitively priced ADC12 from FTA countries, particularly Malaysia, where duty-free imports oered a significant cost advantage.
Raw material trends
In early August, LME aluminium prices strengthened, with the three-month contract averaging $3,244/t, up $95/t (3.0%) m-o-m from $3,149/t in July. LME inventories declined to 259,450 t from 282,350 t in July, down 22,900 t (8.1%), reflecting tighter metal availability and supporting prices.
Supply concerns also provided a floor, with China’s production ceiling limiting significant output growth, while energy-related risks continued to pose uncertainty for smelter operations. Firmer copper prices and broader strength across industrial metals further improved sentiment. However, expectations of rising Indonesian aluminium supply and exports, alongside higher Chinese semi-finished aluminium exports, are limiting the upside potential.
Supply concerns also supported prices, with China’s production ceiling limiting significant output growth and ongoing energy-related risks adding uncertainty to smelter operations. Meanwhile, strong copper prices and broader industrial-metal sentiment provided additional support. However, expectations of rising Indonesian aluminium supply and exports, along with increased Chinese semi-finished aluminium exports, are limiting the upside potential.
Among key imported grades, US-origin Tense scrap increased by $90/t m-o-m to $2,530/t in August, from $2,440/t in July, while UK-origin Wheel scrap rose by $133/t to $3,298/t, supported by tighter availability and firmer scrap market conditions.
Meanwhile, China-origin silicon metal 553 prices edged down by $5/t to $1,342/t from $1,347/t, amid subdued downstream demand and continued supply availability in China.
Outlook
India’s ADC12 market is likely to remain under pressure in the near term amid comfortable OEM inventories, subdued buying activity, ample domestic availability, and competitively priced FTA imports, particularly from Malaysia. The sharp correction in the leading automaker’s August settlement is also likely to weigh on domestic prices. However, tight availability of quality casting-grade scrap, along with UAE scrap export restrictions and proposed EU measures, could limit the downside and provide medium-term price support.
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