Hindustan Copper hikes prices by 8.5%

Cashing in on the global shortage of raw materials amid rising demand, Hindustan Copper, the public sector copper producer, has raised its provisional basic prices by 8.5 per cent across all product categories effective April 1.

With this revision, the provisional prices of cathode full and cut have risen to Rs 354,100 a tonne and Rs 355,500 a tonne while the price for cc rod 8mm standard is hiked up to Rs 358,200 a tonne.

Cc rod 8mm non standard is now quoted at Rs 357,800 a tonne while cc rod between 11-16 mm is sold with an upward revision of 8.47 per cent at Rs 359,800 a tonne.

The company also raised final prices of copper products by 8.5 per cent for March with cathode full and cut now settled at Rs 372,712 a tonne and Rs 374,212 a tonne.

The final settlement price of cc rod of 8 mm standard and non standard now stand at Rs 377,013 a tonne and Rs 376,613 a tonne while the final price of rod of higher diameter, between 11-16 mm, is settled at Rs 378,734 a tonne.

Surprisingly, the price revision does not reflect the ongoing trend on the London Metal Exchange as the metal's price on the world's largest metal trading platform has been nearly stagnant in the last one month. The metal slipped from $8,565 a tonne in the beginning of March to $,8520 at the end of the month.

Usually, domestic copper majors, including Hindalco Industries, Sterlite Industries and Hindustan Copper, revise prices taking into account the movement of prices on LME.

"The company derives the provisional price on the basis of a formula chalked out considering the last month's average price of copper on LME, rupee movement against dollar, various taxes, etc. Hence, the price does not necessarily move in tandem with the ongoing price movement on the world market," said a company official.

At present, a severe global shortage of copper concentrate persists. Therefore, the benchmark treatment and refining charges (TC/RC), which the smelter gets from the miner, have fallen to $140 a tonne.

Now, the low TC/RC realisations have pushed many smelters into the doldrums. "Negotiations are still on between smelters and miners to raise TC/RC but a dramatic rise looks impossible because of unavailability of copper concentrate globally.

Therefore, smelters across the globe have cut their output at least by 25-30 per cent and India is no exception. According to an industry source, Indian smelters have also cut output by 10-15 per cent from their reduced capacity at 55-60 per cent. Importantly, the recovery of copper scrap is also witnessed at record low.

However, the world demand of copper is expected to grow at least by 5-6 per cent because of a sudden spurt in the demand for electronic items where copper is largely used.

Demand of the red metal in India is also growing by leaps and bounds because of the boom in the construction sector. India consumes about 6.5 lakh tonnes of copper and produces over 1 million tonnes annually.