Aluminium alloy (ADC12) prices surge by INR7000/t W-o-W owing to increased imported tense scrap prices

During the week ending on February 2, 2024, base metals prices experienced a significant downturn on the London Metal Exchange (LME), with three-month aluminium futures dropping by 1.8 per cent to $2,233 per tonne, while nickel settled at $16,235 per tonne, marking a 3.3 per cent decrease.

Throughout the week, spot market prices for primary aluminium ingots (P1020) experienced gains spurred by major primary players' price increases. In India, spot prices for aluminium ADC12 alloy ingots rose by INR 7,000 per tonne week-over-week to INR 197,000 per tonne, propelled by escalating local and imported tense scrap prices.

Contrary to the global trend, prices in the Indian non-ferrous metals sector remained elevated. Both imported and domestic segments witnessed gains, according to evaluations by BigMint. Market trade activities gained momentum throughout the week despite lingering concerns about escalating freight rates.

Aluminium 

India's foremost automobile manufacturer established February 2024 settlement prices at INR 199,500 per tonne, marking an increase of INR 8,500 per tonne month-over-month. Shortages in raw materials, particularly tense scrap, led to heightened prices in northern India, while Chennai encountered scarcity, impacting local manufacturers. Conversion spreads expanded by INR 2,000-3,000 per tonne, reflecting positive sentiments and enhanced capacity utilization.

The Indian market for imported aluminium scrap witnessed a notable price surge, climbing by $60-70 per tonne week-over-week. Factors such as rising futures, increased freight rates due to conflicts in the Red Sea, limited material availability in the western region, and heightened demand all contributed to this upward trend. In the domestic market, scarcity of tense scrap maintained high prices, rising by 3 per cent week-over-week to INR 166,000 per tonne from INR 161,000 per tonne in the preceding week.

Global updates

In January, India's manufacturing sector exhibited notable growth, as indicated by the final Manufacturing PMI reaching 56.5, marking its highest level in four months. According to data from the Ministry of Economy, Trade, and Industry (METI), Japan's industrial output rose by 1.8 per cent in December 2023 compared to the previous month, propelled by a surge in machinery production. Toyota Motor announced a record-breaking sales figure of 11.2 million vehicles in 2023. This achievement solidifies Toyota's position as the world's leading automaker for the fourth consecutive year.

Received under the content exchange agreement with SteelMint