The spot prices for automobile-grade aluminium ADC12 alloy ingots experienced a rise of INR 5,500 per tonne, reaching INR 189,500 per tonne. This increase can be attributed to the surge in raw material prices, specifically tense prices, which climbed by INR 5,000 per tonne to INR 160,000 per tonne ex-Delhi, excluding GST.
Reason behind the price hike
Imported scrap prices have gradually risen in recent weeks, owing to limited offers during the Christmas/New Year Holidays. The influence of sufficient future bookings has also played a role, particularly from the Middle East and Africa, causing a notable increase of approximately $60-70 per tonne.
The current spread between tense and ADC12 is around INR 30,000 per tonne ex Delhi. Specifically, the prices of imported tense scrap from the UAE, within the Middle East, saw a rise of $30 per tonne to reach $1,670 per tonne yesterday. South American Tense (3 per cent) is currently priced at $1,760-1,770 per tonne, while African Tense (7-8 per cent) is at $1,650-1,670 per tonne.
In the USA, the indicative price for Zorba 95-5 stands at $1,970-1,980 per tonne. Limited availability of materials is noted, driven by better bids from surrounding regions like North America. The increased demand for die-casting units in these regions has led to a surge in demand for materials, consequently driving prices upward. The considerable hike in imported prices has had a cascading effect on domestic prices. The domestic market is highly reliant on import volumes and price trends, thus experiencing a significant increase due to these external factors.
Domestic scrap supply
Furthermore, it is observed that domestic scrap supply experiences a decline during the winter season, leading many recyclers and traders to adjust their prices to market dynamics. Notably, a significant monthly price hike by a major automobile company in the Indian and East Asian markets, ranging between $24-30 per tonne, increased prices within the domestic market.
The three-month futures for aluminium stand at $2,300 per tonne, indicating a weekly decrease of approximately $70-80 per tonne due to an unexpected price contraction today. Reliable sources report that Tense scrap is valued at INR 158,000-159,000 per tonne, while ADC12 in Chennai commands a price of around INR 189,000-190,000 per tonne. An Aluminium commercial ingot with 97 per cent purity is quoted at INR 180,000-181,000 per tonne ex-works Ahmedabad, exclusive of GST.
Reports suggest that some ADC12 deals from typical East Asian destinations were rumoured at $2,350-2,360 per tonne CIF, although confirmation was pending at the time of reporting. Meanwhile, the price of Silicon 553 in Delhi is currently INR 196,000-197,000 per tonne. Notably, Silicon 553 of Chinese origin has experienced a week-on-week increase, reaching $2,155 per tonne, marking a $65 per tonne upswing.
The potential scarcity of raw materials and anticipated increases from major original equipment manufacturers (OEMs) could contribute to near-term price resurgence. This, coupled with positive market sentiments, may provide additional support.
Received under the content exchange agreement with SteelMint
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