India: Aluminium ADC12 prices rise on higher raw material prices

Aluminium ADC12 alloy ingot automobile equivalent spot prices rose by INR 2,000/t to INR 183,000/t tracking higher Tense scrap prices by INR 1,000/t to INR 154,000/t exy Delhi, excluding GST, w-o-w, as per SteelMint's assessment.

At the same time, the three-month futures for aluminium currently hovered at $2,260/t at the time of reporting, reflecting a weekly increase of approximately $100-120/t. Furthermore, inventories in the LME warehouses stood at 511,450 t at the close of yesterday's trading, marking a high of 3.5 months.

The Tense scrap prices in India witnessed an uptrend in prices by INR 1,000/t and were at INR 154,000/t exy Delhi, This upswing is attributed to limited availability of recyclable material, i.e; Tense, results matching minimum spreads.

Further, imported Tense scrap prices from the Middle East region particularly from the UAE rose by $35/t and were recorded at $1,575/t till yesterday, however, current offers heard were around $1,610-1,620/t till second half today. The existing difference between Tense and ADC12 stands around INR 29,000-30,000/t.

The current bids for ADC12 from usual destinations like East Asia are being heard at $2,240-2,260/t on CIF basis, which is not viable as per the current market dynamics as domestic prices are being traded with immediate payment terms, conversation with one of the established alloy manufacturers based in the Northern region.

A leading automobile manufacturer in India, also a key influencer in the pricing dynamics of domestic aluminum alloy ingots, has declared a monthly settlement price of INR 191,000/t for ADC12 for January 2024. This reflects a m-o-m increase of INR 2,000/t, thereby influencing local prices.

"One of the largest manufacturers of South Korea has increased its quarterly premium for next quarter by $25-30/t to roughly $2,435-2,440/t," shared one of the traders. But it is yet to be re-confirmed till the time of reporting.

According to sources, SteelMint learned that the observed local price for Tense in Chennai is approximately INR 155,000-156,000/t, while ADC12 is reported to be at INR 184,000/t, exw and excluding GST.

Outlook

Near-term prices may see some rebound levels in the alloy ingot post automobile companies scheduled maintenance along with tight raw material supply from the Western region due to the Christmas festival.