India’s ADC12 aluminium ingot prices move upward despite stable raw material cost

The spot prices for Aluminium ADC12 alloy ingot (equivalent to automobile grade) witnessed a slight increase of INR 3,000 per tonne, reaching INR 211,000 per tonne W-o-W exw Delhi, excluding GST. The market reflects a somewhat tense situation in Chennai, with offers at INR 182,000 per tonne.

However, actual tradable levels are within the range of INR 180,000-181,000 per tonne. Furthermore, the spot price for ADC12 in Chennai has risen to INR 214,000-215,000 per tonne exw, excluding GST, showing an uptick of INR 2,000 per tonne compared to the previous week.

A notable Indian automotive company has disclosed its monthly settlement price for ADC12, elevating it by INR 5,000 per tonne to INR 212,400 per tonne for April. Market observers attribute this increase to consistently higher raw material prices in the domestic market.

OEM prices expected to be higher

However, they also suggest that OEM (Original Equipment Manufacturer) prices are expected to be notably higher than the spot market, as the price setter's rates seem less aggressive given the current market dynamics. Materials are now offered at premiums of up to INR 220,000/t, with credit payment terms available.

ADC12 prices have continued to remain firm, driven by a notable demand-supply imbalance. Demand has shown strength, while supply remains constrained within a narrow range.

An alloy producer stated, "We have refrained from engaging in new purchase enquiries, particularly for ADC12, unless the price is at least INR 215,000/t - with an advance payment term. However, we may consider a small portion of the supply at premium bids. For new buyers seeking credit, prices will start at INR 220,000/t and above."

The ADC12 ingot supply chain presents a considerable challenge, given the current market conditions. Manufacturers are grappling with limitations due to the scarcity of casting scrap, resulting in challenges to maintaining appropriate margins. Another manufacturer has noted that market participants typically delay immediate transactions during the final days of a financial year, with new trades often commencing in the next fiscal year.

Pricing trend

Yesterday, the prices of imported tense scrap from the Middle East, particularly from the UAE, increased by $15 per tonne, reaching $1,850 per tonne. Tense scrap (6-7 per cent) from the US was noted at $1,900 per tonne, marking a $15 per tonne increase. Zorba 95-5 from the UK was $2,050 per tonne CFR Nhava Sheva.

On the other hand, three-month futures for aluminium are currently at $2,283 per tonne, reflecting a week-on-week rise of $15 per tonne. Meanwhile, China-origin silicon 553 prices are around $1,940 per tonne CIF Mundra, showing a decrease of $80 per tonne week-on-week.