Aluminium, zinc majors hike prices

Nalco increases rates by Rs 5000 a tonne, while Hindustan Zinc by Rs 7900 a tonne

Producers of base metals raised their products' selling prices again substantially, with immediate effect. Aluminium major National Aluminium Company jacked up its prices by Rs 5,000 a tonne, third time since the beginning of the year.

The integrated zinc producer, Hindustan Zinc, too raised its zinc selling prices fourth time, 20 per cent accumulatively, in the same period. This time zinc prices went up by Rs 7,900 a tonne.

The present rise was mainly attributed to the rising international metal prices, touching all-time highs virtually in every session.

After this hike aluminium ingot (IC20) surged to Rs 1,15,950 a tonne, while aluminium alloy ingot (IA10) is selling at Rs 1,21,550. Aluminium billet (CH10) went up to Rs 1,21,950 a tonne and aluminium sow ingot (SE07) soared to Rs 1,19,000 a tonne. Aluminium wire rods (WE20) too rose, to Rs 1,27,550 a tonne, and aluminium alloy wire rod (WA10) shot up to Rs 1,29,550 a tonne.

Zinc prices, on an aggregate, shot up by Rs 21,600 across all segments. Special high grade jumped to Rs 1,24,700 a tonne from Rs 1,07,300 a tonne on January 1. From Rs 1,16,800 a tonne on January 21, after the last revision, the price surged by Rs 7,900 a tonne.

The next variety, high grade zinc, was also hiked to Rs 1,24,500 a tonne, effective from today, from Rs 1,07,100 a tonne one month ago, and by Rs 7,900 a tonne from the last revision on January 21.

Meanwhile, cadmium prices have been reduced by over 20 per cent, also in line with falling global prices to Rs 174 a kg from Rs 221 a kg, effective immediately.

The Sterlite-controlled company usually revises zinc prices on a fortnightly basis. However, the surging prices on the London Metal Exchange (LME), in recent times, forced the company to raise prices thrice in a month.

Concerns over anticipated supply deficit in 2006 and strike in major zinc producing companies in Peru, zinc prices shot up by $400 on the LME this month.

According to a report, driven by a continuous supply crunch in the market, world zinc prices will remain on the higher side this year. Zinc stocks will be critically low in 2006, despite possible new products that will add an estimated 1 million tonne a year to global supply between 2005 and 2007, the report said.

In the concentrate market, an expected rise in the Chinese demand, combined with already low inventories, will keep refined world zinc supply in deficit for a third consecutive year in 2006. In 2005, the global concentrate market was in deficit for the fourth consecutive year with a cumulative shortfall of over 9,00,000 tonne.

Global demand in 2006 will continue to be driven largely by China, although a modest recovery in the Western consumption is also expected.

Zinc prices are predicted to soften at least for the time being as workers at two mines operated by zinc-lead miner Volcan Compania Minera SAA returned to work.

Workers at Volcan's San Cristobal and Andaychagua mines went on a strike about a week ago over schedule changes and the company's efforts to outsource labour. Later, the government declared the strike illegal.

Meanwhile, zinc consumption surpassed the production during the January-November 2005 period, pushing the metal prices internationally.

Global refined zinc production stood at 9.335 million tonne in the same period, up from 9.277 million tonne a year earlier, and against consumption of 9.723 million tonne, up from 9.649 million tonne in the previous corresponding period. This left the market with a deficit of 3,88,000 tonne.

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The present rise was mainly attributed to rising international metal prices, touching all-time highs virtually in every session

Hindustan Zinc, too raised its zinc selling prices fourth time, 20 per cent accumulatively, in the same period.