HZL hikes zinc prices by 3.74%

Hindustan Zinc (HZL) has raised zinc prices by 3.74 per cent at Rs 5,900 to sell at par with the international prices. The price revision is effective from Saturday.

With the current revision, high-grade zinc is sold at Rs 1,63,700 per tonne compared with Rs 1,57,800 per tonne on February 10. Zinc prices were left unchanged when the company revised the prices on February 15 and hiked lead prices to Rs 87,000 per tonne compared with Rs 85,900 per tonne on February 10.

Special high-grade zinc, ex-Chanderia smelter, is now quoted by the company at Rs 1,64,200 per tonne, while the metal for prime western with a purity level of 98.5 per cent is sold at Rs 1,60,900 per tonne.

According to sources, the largest zinc producer in the country revises metals' prices as and when the benchmark LME price becomes incomparable.

Between the company's two price revisions, zinc price on the LME shot up sharply by $255 to close the week at $3,389 which is attributed to Chinese traders' stockbuilding before proceeding on the Lunar Year holidays. The President's holiday in the US on Monday also helped stockists to ensure their supplies against commitments for consumers, which also helped zinc prices gain on the LME.

Meanwhile, inventories in the LME-registered warehouses climbed down to 97,025 tonne on Friday from 98,350 tonne on February 9.

Demand of refined zinc in the country is rising. According to industry sources, demand is expected to reach around 5.5 lakh tonne in 2007 from 4.75 lakh tonne in 2006.

World zinc output reached 10.669 million metric tonne in 2006. With output at 2.75 million metric tonne China has maintained the status of largest zinc-producing country in the world for 15 straight years. China turned a net zinc importer in 2004 and imported about 4,00,000 tonne zinc per year in the past couple of years.

World zinc prices continued its dramatic increase during the last quarter of 2006. In November, spot zinc prices were around $4,500 a tonne. The price rise in last year reflects a strong demand growth, particularly from China, coupled with relatively low supplies of zinc concentrates.

According to a report of the Australian Bureau of Agricultural and Resource Economics (Abare), zinc prices are expected to rise by almost 30 per cent to reach $4200 a tonne.

World zinc consumption is reported to have risen by 3 per cent to 11 million tonne in 2006 and is expected to rise by 2 per cent in 2007 to 11.2 million tonne.