India: Aluminium ADC12 ingot prices correct further on subdued demand

Aluminium alloy ingot ADC12 prices have corrected by INR 3,000/t w-o-w to INR 195,000/t ($2,365/t) on lower demand and a subdued export market.

Aluminium LME prices corrected by 7.5% compared to last month. Prices are currently hovering at around $2,400/t. This week, minor correction was witnessed in domestic tense scrap prices.

The majority of importers and traders were cautious about purchases due to the high volatility in LME prices, and mid-sized die-casting factories, particularly those based in the north, continued to operate at a lower capacity utilisation rate.

“In the export market, some offers were heard in the range of $2,250-$2,350/t CIF Japan for ADC12, although no deals were concluded,” an exporter source informed SteelMint.

Many alloy ingot producers in the domestic market have disclosed that there is now slight selling pressure, which may cause prices to move in line with market conditions.

The majority of market participants used the Maruti Suzuki ADC12 prices as benchmark to conclude deals for February that were at the level of INR 205,000/t. One major Faridabad-based producer told SteelMint: “We are expecting ADC12 prices in March to rise beyond INR 210,000/t.”

• Prices of tense scrap stood at INR 160,000-161,000/t exy Delhi, excluding GST, whereas a few sellers were not ready to release material at this level and offers were INR 1,000-1,500/t higher.
• ADC12 ingot prices are assessed at INR 195,000-196,000/t exw Faridabad (excluding GST), down INR 3,000/t d-o-d.
• Currently, small and mid-sized manufacturers have a conversion spread from tense scrap to ADC12 in the regional market at around INR 28,000-30,000/t ($340-364/t).

Auto production up in Jan’23

India’s production of passenger vehicles in January stood at 298,093 units, up 62,784 units from 235,309 units in December.

Outlook

The aluminium alloy industry is facing subdued demand due to lower exports to China and Japan. However, there are high expectations from major consumers such as Maruti Suzuki due to the improved performance of the automotive industry in January.