Base metals surge 10% in 15 days on LME push

Zinc slab up 15% to Rs 164 a kg; Copper wire bar 11% to Rs 325 a kg.

Base metals, led by zinc slab and copper scrap, recorded an average 10 per cent rise in prices in the domestic non-ferrous metals market in the first fortnight of the new financial year.

This is in line with the surge in the prices of copper and zinc to fresh all-time highs on the London Metal Exchange (LME).

Zinc slab posted a phenomenal 15.49 per cent growth to Rs 164 a kg from Rs 142 a kg, while virgin copper wire bar surged 10.92 per cent to Rs 325 a kg from Rs 293 a kg. Copper heavy scrap and light scrap shot up 12.36 per cent and 12.31 per cent to Rs 309 a kg (Rs 275) and Rs 301 a kg (Rs 268), respectively, in the period under consideration.

Moving in tandem, copper utensil scrap and sheet cutting perked up by 12.55 per cent and 12.64 per cent to Rs 278 a kg (Rs 247) and Rs 294 a kg (Rs 261), respectively, in the first 15 days of this month.

Meanwhile, integrated zinc producer Hindustan Zinc raised its product prices fourth time this month by Rs 6,100 across all varieties as a consequence of rising prices in the international market.

In the first fortnight of April, the company recorded the highest ever surge of 12 per cent or Rs 16,700 a tonne to Rs 1,57,100 a tonne (special high grade).

Other market movers such as tin slab and nickel cathode also recorded an upsurge of 9.07 per cent and 11.94 per cent in the first fortnight of April to Rs 469 a kg (Rs 430) and Rs 900 a kg (Rs 804), respectively.

Laggards aluminum ingot and lead ingot failed to capitalise on price advances in the domestic market and remained flat Rs 102 a kg (Rs 101) and Rs 65 a kg (Rs 64) respectively.

Renewed fund buying pushed copper and zinc to fresh all-time highs at $6,200 a tonne ($5,561) and $3,100 a tonne ($2,727) on the LME.

Investors' never-ending appetite for commodities is mainly attributed to this upsurge, which has been triggered, among other factors, by diminishing inventory levels in some parts of the world.

Inventory levels have slumped up to 10 per cent from where they were on April 3. While copper stock declined by 9,025 tonne to 1,11,650 tonne, aluminium inventory closed at Rs 7,49,900 tonne from 7,75,900 tonne on April 3.

The concern over the US-Iran strife over Iran's nuclear ambition has pushed oil prices to eight-month highs, resulting in further fund money being channelled to commodities, especially base metals, a trader said.

Without revising product prices, the only integrated copper producer in the country Hindustan Copper raised financial arrangement by Rs 14,000 a tonne mid-month in each variety, which indicates that the company will raise more money for its safety in case the final prices are announced lower than the current financial arrangement.