Metal prices may follow rising LME quotes

Domestic metal sector "" both ferrous and non-ferrous "" is set to witness a rise in prices from January 1. The increase in non-ferrous metals is an outcome of prices firming up on the London Metal Exchange (LME) in December, primarily driven by strong fundamentals.

Leading the price hike is aluminium ingot, which is likely to increase by Rs 2,500-3,000 per tonne to stand at Rs 1,05,000 per tonne.

"Domestic non-ferrous metals prices always track LME prices. Considering there was a significant improvement in the LME aluminium metal prices in December, leading domestic companies such as National Aluminium Company, Hindalco, Bharat Aluminium Company will be forced to increase prices," industry sources said.

Aluminum prices on the LME have grown more than five per cent in December from $1,850 per tonne to $1,947 per tonne, on the back of sustained demand.

An international metal sector analyst said, "The trade in the physical market has become tight, in line with the trend in the futures market. This has pushed up prices. Also, extensive fund buying has further propelled the rates."

International alumina prices have also remained firm, due to shortage and unavailability.

Global copper prices have remained flat at around $3,200 per tonne levels on the LME during December.

A senior executive from a leading copper company said, "Looking at the current LME trend, both the international and domestic copper prices are likely to harden in the coming year, beginning January." However, analysts said an appreciating rupee may have a softening impact on domestic prices.

Meanwhile, steel hot-rolled coil prices are set to increase by Rs 500 per tonne to Rs 29,500 per tonne.

However, the price increase in the long steel products like bars and angles is likely to be sharper in the region of Rs 1,000 per tonne.

Annual contracts prices of iron and coal have also increased by around 20 per cent, compared with the previous year's prices.