Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian secondary manufacturers have landed in a tight spot with the prices of imported scrap grades escalating on one hand and China lowering import prices of brass billets and aluminium alloys on the other. Manufacturers said that they would not lower prices further and would rather wait for a revival of domestic demand from the auto sector. 


ADC 12

Secondary alloy producers in North India said they will not export ADC 12 alloy below $1,400- 1,420/mt cfr China level. Davis Index heard ADC 12 cfr China offers at $1,320/mt-1380/mt on Friday, down from $1440-1400/mt from last week. The weekly Davis Index for ADC 12 delivered Chinese consumers was at $1,443- 1,497/mt in March this year, that is, before the COVID-19 lockdown imposed from March 24. Export rates to China have gone down to $117-123/mt from March to June, if price indications from Chinese buyers are considered. Manufacturers said that imported Zorba prices with minimum attachment have gone up by $50-60/mt from their India delivered prices in March. Export margins have become so slim that manufacturers would rather wait for the revival of domestic auto demand than continue to export at lower levels.


India exported 73,057mt of aluminium alloys in Jan 2019-2020, out of this, 20,160mt (27.59pc) were exported to Korea and 18,813mt (25.75pc) were exported to China. Chinese exports rose in three months starting from November to 4,054mt, 6,205mt in December, and 6,466mt in January after China curbed the import of scrap from July 2019. 


In the prior-year period, India exported 12,265mt of aluminium alloys in Jan 2018-2019 period. Out of this, 3,677mt (29.98pc) was exported to the US; 3,355mt (27.35pc) to Japan and 2,585mt to Korea. India exported only 99mt of aluminium alloys to China in this period. 


Brass Billet export

Brass Billet manufacturers from Jamnagar said that they will not sign new deals with China unless their Chinese counterparts revise brass billet import rates. Manufacturers exporting billets to China are currently forced to operate at $120/mt margin which is down from $251-484/mt in March before the lockdown was announced in India.


Davis Index heard trades of brass billets cfr China at $3,770/mt. The price of raw material used in manufacturing brass billets; yellow brass has gone up to $3,650/mt cfr India port. Before the lockdown was announced in India, the weekly Davis Index of brass billets cfr China had settled between $3,601- 3,910/mt in March. The raw material i.e. yellow brass weekly Davis Index fluctuated between $3,117-3,659/mt.


In Jan 2019-2020 period, India exported 6,120mt of brass billets. Out of which 5,974mt(97.61pc) were exported to China alone, followed by 71mt (1.16pc) to the US and 13mt (0.25pc) to Bangladesh. In Jan 2018-2019 period, India exported 384mt of brass billets, out of this 292mt (76,04pc) were exported to China alone, followed by 29mt to the US and 20mt to Germany.


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