Base metal majors jack up prices

Buoyant global rates seen as trigger

Domestic base metal producers have increased their prices substantially, effective January 1, in sync with international rates.

State-owned integrated copper producer Hindustan Copper, in one of the largest-ever price hike, has increased rates by Rs 11,000 a tonne across the board,.

Aluminium major Hindalco Industries has hiked selling prices by Rs 4,000 a metric tonne, while state-run National Aluminum has raised prices by Rs 3,500 a metric tonne across all product categories.

Hindustan Zinc, the largest zinc producer in the country, also raised its selling prices by about Rs 1,300 a tonne to Rs 107,300 per tonne (SHG) effective January 1, 2006. In the case of aluminium, this is the second price rise within a span of 15 days, following the 5,000 a tonne hike on December 17.

The current hike has increased prices of aluminium ingot IC20 to Rs 111,450 a tonne, while billets CH10 has increased to Rs 114,450 a tonne. Aluminium wire rods WE20 surged to Rs 120,050 a tonne, while aluminium cast strip CS10 has shot up to Rs 120,800 a tonne.

Aluminium prices are going up interruptedly in the international market with the white metal touching all time high of $ 2300 on the London Metal Exchange (LME).

Lower than expected aluminium inventories in November are mainly attributed to the current price rise. Total world aluminum inventories in November fell by 30,000 metric tonne to 3.195 million tonne, from a revised 3.225 million tonne in October. Total unwrought aluminum inventories in November fell by 18,000 tonne to 1.765 million tonne compared with the previous month.

Indian aluminium production, however, was higher at 612,247 tonne, up 6.7 per cent in the first eight months of the financial year.

"A similar price rise in the international market is not the only criterion on which we decide the new price trend. There a number of other factors including comparative realisation in the international markets. If the realisation is better in the international markets, then we increase prices. Ultimately, all are working for making money," a Nalco official said.

An official from Hindustan Copper said, "Monthly average LME copper prices, on which prices are decided, are calculated at $4576.78 in December compared with $4269.34 in November. We had no choice but to raise them in order to bring them at par with international rates."

Despite a 25 per cent surge in output at 329,465 tonne during April-November 2005, prices have picked up owing to higher international prices and declining stocks across global warehouses.

Meanwhile, the move by Hindustan Zinc has boosted grade and prime western zinc rates to Rs 107,100 and Rs 105,300 a tonne, respectively. Internationally, zinc prices are surging because of supply disruption from New Orleans, in the aftermath of hurricanes, and closure of China's third-largest zinc producer Shaoguan Zinc Smelter, with a capacity of 240,000 metric tonne of zinc and lead every year. India's total zinc output during April-November was 171,829 tonne against 155,755 tonne a year ago.

Declining prices on the LME, owing to lowering demand from the petroleum and paint industries, has however forced Hindustan Zinc to cut lead prices by Rs 1,000 to Rs 61,000, effective January 1, 2006.

Total lead output of the country during the first eight months was at 10,975 tonne, up 31 per cent year-on-year.

While copper and zinc producers revise selling prices monthly and fortnightly, aluminium prices are changed depending on market conditions.