Aluminium ADC12 alloy ingot (automobile equivalent) spot prices increased marginally by INR 1,000/t to INR 208,000/t w-o-w exw Delhi, excluding GST.
This price rise was largely attributed to constraint casting scrap supply in the northern and southern regions which is parallelly aligned with strengthening prices from the overseas market.
Presently, tense offers in Chennai stand at INR 180,000/t. However, trade levels are in the range of INR 178,000-179,000/t. Additionally, the spot price for ADC12 in Chennai stands around INR 212,000- 213,000/t exw, excluding GST.
Market dynamics: Insights from participants
ADC12 prices remained marginally supportive and increased by INR 1,000/t in line with the demand-supply mismatch where demand seemed to be high and supply consistently maintained the narrow range. However, a minor metal futures contraction turns the sentiments on a moderate level until a further price hike by major automobile companies.
One medium scale manufacturer from the north region shared “Existing ADC12 sales contracts are turned to bottleneck and it’s very tough to maintain the operational cost due to consistent higher price trend of raw material.”
An alloy producer shared: “We have restrained ourselves from addressing new buying inquiries specifically ADC12 but any new trades won’t be possible below INR 217,000-218,000/t with advance payment term. However, a minor proportionate of supply can be considered upon premium bids. While credit prices for new buyers will start at INR 220,000/t and above.”
Given the current market dynamics, the supply chain for ADC12 ingots is a cause for concern. Manufacturers are facing constraints due to the limited availability of casting scrap, which is hindering them from accepting new orders, especially from new buyers. Another manufacturer has expressed similar concerns, and new bookings will likely commence in the upcoming financial year.
Further, most of the trade participants are now expecting a prospective hike which may be announced by major automobile companies in the very near term and sellers are holding off the new sales orders till the upcoming announcement, BigMint noted.
Aluminum die casters are struggling to meet the demands of OEMs due to supply chain disruptions. End-users are procuring materials at premiums as high as INR 183,000-184,000/t, but these premiums have not yet been confirmed.
In February 2024, passenger car sales in India surged to 372,000 units, reflecting an 11% rise compared to the previous year but a 5% drop from January figures. As the financial year end approaches, automobile OEMs are under pressure to ramp up dispatches to meet their targets.
The current spread between tense and ADC12 stands at INR 28,000/t.
Pricing trend
Imported tense scrap prices from the Middle East, particularly from the UAE, rose by $10/t to $1,835/t on yesterday’s assessment. Tense (6-7%) from the US was heard at $1,885/t, up by $15/t. The price for zorba 95-5 from the UK stood at $2,040/t CFR Nhava Sheva.
However, three-month futures for aluminium were currently at $2,278/t, reflecting a $15/t rise w-o-w. China-origin silicon 553 prices were at around $2,020/t CIF Mundra, down $5/t w-o-w.
Bhavnagar ADC12 spot rate stands at INR 207,000-208,000/t.
Recent offers, deals
ADC12 was bought at INR 212,000/t, ex Chennai – 20 t.
ADC12 bought at INR 215,000/t, ex Chennai (30 days credit) – 15 t.
ADC12 sold at INR 212,000/t ex Delhi ~ 25 t.
ADC12 offers from the UAE to CFR Mundra – $2,450/t.
ADC12 offers from the UAE to CFR Chennai – $2,480/t.
