BigMint's assessment indicates a marginal gain of INR 1,000 per tonne for spot prices of aluminium ADC12 alloy ingots, reaching INR 216,000 per tonne week-over-week. Tense scrap prices stood at INR 188,000 per tonne ex-Delhi, reflecting a weekly increase of INR 1,000 per tonne. The scrap-to-ADC12 spread is recorded at INR 28,000-29,000 per tonne.
Tense scrap prices in Chennai
Market sources indicated that tense scrap offers in Chennai are around INR 188,000 per tonne, with spot prices of ADC12 in Chennai ranging between INR 218,000 and INR 220,000 per tonne ex-works on immediate terms, excluding GST. The spot prices for automobile equivalent manufacturers matched those of a major automaker, at INR 221,000-223,000 per tonne ex-Delhi.
Despite stable Tense prices in the northern region, semi-finished product prices, including ADC12, have remained unchanged week-over-week. This stability persists despite a sluggish trend in purchase inquiries for ADC12, influenced by somewhat reduced demand and affected cash flows due to ongoing elections.
Moreover, a prevailing heatwave has notably hampered worker productivity, resulting in a temporary production slowdown. Nevertheless, despite these challenging circumstances, ADC12 prices have maintained stability amid weak demand and operational challenges.
Market watchers report that major producers are gradually receiving delayed imported materials. This influx is easing pressure on raw material prices, and scrap availability in the domestic market has also improved.
Aluminium scrap imports in April
In April, India saw a 5 per cent month-over-month increase in aluminium scrap imports, following an 18 per cent rise in March. Despite this growth, imports were 4 per cent lower than the same period last year, according to provisional data from BigMint. Total aluminium scrap imports for India reached 135,816 tonnes, showing a modest uptick from 128,861 tonnes in March. However, this figure marks a slight decline compared to April 2023, when imports stood at 141,894 tonnes.
Some medium-scale manufacturers from northern and western India have encountered challenges selling their products at prices lower than initially offered. However, with the gradual easing of imported consignments, they have begun selling at prices lower than INR 217 per kg and in reduced volumes to aid in regular destocking. Additionally, production has been halved due to labour shortages stemming from heatwaves.
The Japanese market has been relatively inactive in its purchasing, but there are expectations for a gradual resumption of activity. Bids for ADC12 from Japan to the UAE are $2,400 per tonne. However, suppliers currently find these levels unfeasible.
According to BigMint's assessment, imported tense (6-7 per cent) from the US was evaluated at $1,970 per tonne, marking an increase of $10 per tonne. Current offers are higher, at $2,030 per tonne. Prices for Zorba 95-5 from the UK closed at $2,150 per tonne CFR Nhava Sheva. Meanwhile, three-month aluminium futures halted at $2,750 per tonne, showing a 4 per cent increase week-over-week.
Outlook
Trade has been limited due to current uncertainties. The market believes that the current levels in ADC12 prices are a temporary phase influenced by liquidity issues and an uncertain political climate. Market stability and clearer trends are expected to emerge post-elections.
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