Raw material costs propel India's aluminium ADC12 prices upward W-o-W

The spot prices for Aluminium ADC12 alloy ingots used in automobiles rose by INR 2,000 per tonne W-o-W, reaching INR 204,000 per tonne. This surge is primarily linked to the rise in local tense scrap prices.

India's prominent automobile manufacturer, which holds significant influence in setting prices within the domestic aluminium alloy ingot market, has revealed its monthly settlement prices for aluminium alloy ingot ADC12 at INR 207,400 per tonne for March 2024. This reflects a monthly increase of INR 7,900 per tonne and signifies the highest level seen in ten months, dating back to May 2023.

North Indian market

In the North Indian market, a scarcity of raw materials, particularly tense scrap, has caused prices to surge to INR 172,500 per tonne ex-Delhi, excluding GST. Seizing the opportunity presented by the current market conditions, some sellers are quoting prices exceeding INR 174,000 per tonne in the Delhi region.

Shifting the focus to the raw materials situation in Chennai, there is a notable shortage, with current offers ranging between INR 171,000 and INR 172,000 per tonne ex-Chennai, excluding GST. Additionally, the spot price for ADC12 in Chennai currently stands at INR 204,000-205,000 per tonne ex-works, excluding GST.

On another note, a separate source has informed us that certain small-scale ADC12 manufacturers are exploring various options, such as incorporating Taint Tabor with some additions alongside high impurities of Tense and Trump, to produce ADC12. However, this strategy is facing specific challenges.

The price difference between Tense scrap and ADC12 is INR 31,500 per tonne. Nevertheless, known mills are now trending towards a gap of approximately INR 35,000 per tonne, following the previous pattern.

Imported market trends

This week, imported Tense scrap prices from the Middle East, particularly from the UAE, saw a decrease of $25 per ton, settling at $1,695 per ton. This comes after several weeks of consecutive price increases. Tense scrap (6-7%) from the US was reportedly priced at $1,775 per ton, down by $15 per ton. In contrast, the price for UK-origin Zorba 95-5 rose to $2,010 per ton CFR Nhava Sheva, marking a $50 per ton increase, according to BigMint's recent price assessment.

Meanwhile, three-month futures for aluminium were currently at $2,247 per ton, showing a slight increase compared to the previous week. Prices for China-origin silicon 553 remained steady at around $2,030 per ton CIF Mundra as the Chinese market resumed activity following the Lunar New Year holidays.

Domestic market

In the domestic space, scarcity of raw materials, particularly tense scrap, has kept prices on the higher side. Tense scrap prices are at INR 172,500/t, exy-Delhi (excluding GST). Near-term ADC12 prices might escalate due to the scarcity of raw materials in the domestic market, and major automobile companies' prospective price hikes are major factors supporting upcoming price trends.

Received under the content exchange agreement with SteelMint