Spot prices of aluminium ADC12 alloy ingots (non-OEM) in Delhi NCR and Chennai fell w-o-w following placement of the Union Budget for 2024-25, as per BigMint’s latest assessment. In the Delhi-NCR region, ADC12 spot prices were assessed at INR 210,000/t ex-Delhi, aligning with domestic tense scrap prices, which settled at INR 176,000/t ex-Delhi.
Likewise, ADC12 prices in Chennai were reported at INR 212,000/t on immediate payment basis, excluding GST. At the same time, casting scrap prices were at INR 178,000/t ex-Chennai.
The current spread between tense and ADC12 spot levels are at INR 33,000-34,000/t.
Additionally, the Indian market saw decreased activity after the interim Budget for the 2025 financial year (FY’25) was presented in Lok Sabha. Nonetheless, the import duty on aluminum scrap imports will remain at 2.5% for FY’25.
LME aluminium prices at 3-month low
Meanwhile, three-month LME aluminium prices fell $100/t to $2,312/t compared with the previous week’s $2,420/t, Notably aluminium prices reached a three-month low.
According to BigMint’s assessment, tense scrap from the Middle East, particularly the UAE, saw a decrease of $80/t, settling at $1,790/t. Zorba 95/5 from the UK also decreased by $40/t to $2,000/t CFR west coast, India.
Meanwhile, India’s imports of aluminium scrap stood at 167,641 t in June 2024, moving up marginally by 4% m-o-m from the previous month’s 161,644 t.
Market reacts to falling prices
A reliable seller source said: “We are currently in a restocking phase for scrap materials. This strategy aims to position us to release the inventory at a higher price and achieve an optimal profit margin once the monsoon season concludes.”
A buyer source said, “Budget adjustments have not affected aluminum players, but the market is currently experiencing a slowdown due to liquidity problems. There are no solid offers, and both buyers and suppliers are showing limited interest in making deals. The market lacks clarity, with some suppliers setting prices unrealistically high, while bids are coming way below what was expected.”
Reliable sources anticipate that, “Prices will begin to trend upward next month as trading activities, currently slowed by the rains in most regions of India, return to normal. In the meantime, they plan to stockpile materials at lower prices”.
China’s silicon market
Prices of China’s silicon 553 have dropped $60/t to $1,840/t CFR Mundra amid easing freight rates. However, buying interest has stayed low because major aluminium alloy manufacturers have sufficient silicon supplies leading to reduced market activity.
Additionally, the freight rate from China to Mundra was heard at $3,000-$3,200 per 20-ft container.
Budget FY’25 update: Basic customs duty on silicon metal reduced to nil
The basic customs duty (BCD) on silicon metal (HS:28046900) has been reduced to nil from the previous 5% in India’s Budget for FY’25 placed in the Lok Sabha today. This decision aims to lower import costs. In FY’24, India imported 84,000 t of silicon metal, with China being the primary source supplying approximately 70-80% of India’s imports.
Domestic scrap market
In the domestic market, tense scrap prices have decreased by INR 4,000/t and 3,000/t in both Delhi and Chennai. According to BigMint’s assessment, domestic tense scrap prices are now at INR 176,000/t ex-Delhi NCR and INR 178,000/t ex-Chennai. This decline aligns with the falling LME aluminium prices and sluggish market trends.
Deals
ADC12 bought at INR 220/kg, ex-Chennai on 45 days payment terms.
ADC12 bought at INR 223/kg, ex-Haryana.
ADC12 bought at INR 218/kg, ex-Chennai on credit payment terms of 30 days.
China silicon 553 bought at 1,800/t, CFR Chennai.
UK wheels bought at $2,260/t, CFR Chennai.
Outlook
Looking ahead, aluminum scrap and ADC12 prices are expected to decline further due to uncertainties in LME aluminum pricing and the seasonal impact of the monsoon. Buying activity is also expected to remain slow.
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