India’s ADC12 aluminium ingot prices remain stable W-o-W amid high freights

According to BigMint's latest assessment, spot prices for ADC12 aluminium alloy ingots, commonly used in the automotive industry, remained stable week-over-week in both the Delhi NCR and Chennai regions. In Delhi NCR, ADC12 spot prices were evaluated at INR 213,000 per tonne (ex-Delhi), which is in line with domestic tense scrap prices of INR 181,000 per tonne (ex-Delhi).

Similarly, ADC12 prices were reported in Chennai at INR 215,500 per tonne on an immediate payment basis, excluding GST, while casting scrap prices stood at INR 182,000 per tonne (ex-Chennai). Meanwhile, three-month LME aluminium prices have remained largely steady at $2,490-2,500 per tonne, compared to the previous week's $2,525 per tonne.

Indian market analysis

In contrast, the Indian domestic market is witnessing robust demand for ADC12. As a result, market participants are prioritising domestic sales over exports, particularly amidst uncertain global trade conditions.Imports of ADC12 from Malaysia to Chennai are declining due to increased freight rates, resulting in reduced import inquiries and firmer domestic ADC12 prices. Meanwhile, there has been a rise in inquiries from India for UAE materials, which benefit from more favourable freight conditions than Southeast Asian sources.

In addition, some alloy manufacturers assert they have sufficient scrap inventories to meet demand for the next one to two months, largely consisting of delayed consignments purchased at higher price levels. These manufacturers are cautious about lowering their offers for ADC12 alloy, as doing so would adversely affect their profit margins. Material availability for certain grades is expected to tighten ahead of the European holidays, prompting buyers to seek imported scrap before market activity slows actively. There is also anticipation of further price increases once the holiday season commences.

Current freight rates

China to EU: $6,500-7,000 per 20 feet (ft) container

Shanghai to NYC: $5,600-6,000 per 20 ft container

Malaysia to Chennai: $3,000 per 20 ft container

Price for tense scrap

BigMint's latest assessment indicates that prices for tense scrap from the Middle East, especially the UAE, increased by $50 per tonne, reaching $1,830 per tonne. Additionally, Zorba 95/5 scrap from the UK was priced at $2,060 per tonne CFR west coast of India. Furthermore, specific grades, such as US tense 6-7 per cent, saw a week-over-week price rise of $30 per tonne, bringing the price to $1,850 per tonne CFR West Coast.

The demand for ADC12 from Japan has sharply declined due to the depreciation of the Japanese yen, which now stands at 161.4 against the US dollar. Consequently, buyers are displaying minimal interest in purchasing materials. Recent export inquiries from Mundra to Japan were quoted at $2,320 per tonne CFR Mundra, while current offers hover around $2,420 per tonne.

Scrap market scenario

Domestic tense scrap prices have remained stable in both Delhi and Chennai markets. According to BigMint's assessment, prices for domestic tense scrap were INR 181,000 per ton (ex-Delhi NCR) and INR 182,000 per ton (ex-Chennai).

Outlook

Demand for alloy ingots in India is steady this week, with sellers expecting settlement prices to mirror those of the previous month. However, potential corrections in scrap prices could prompt a downward adjustment in ingot prices.

sourced from SteelMint under the content exchange agreement