Metal producers hit by rising inventories on account of poor offtake amid economic slowdown and lower exports
The BSE Metal Index has hit a low of 8914, its lowest level since May 2009, in intra-day trade so far on rising concerns of high inventory levels because of poor offtake amid economic slowdown locally while exports have been impacted by lower imports from China, the world's largest consumer of metals.
So far in current calendar year 2013, the metal index has down by almost 18% against less than 3% drop in Sensex.
Globally, LMEX, a gauge of six metals traded on the London Metal Exchange (LME), fell 1.35% to 3,340.60 on Friday, March 1, 2013.
LME Copper prices remain under pressure, weighed by persistent rise in LME warehouse stocks. LME inventories are already up by literally 40% during this year and cancelled warrants have also fallen substantially, said an analyst at IIFL.
Copper & Aluminum fell to its lowest in more than 3-months on Friday, burdened by a strong dollar, cooling factory growth in major metals consumer China and worrying economic and political signals from Europe and the United States, Mangal Keshav said in a report.
Copper stocks at LME warehouses rose to 458,775 tons, up 43% so far this year and a new high since Oct. 2011, the report added.
In the domestic market, Sesa Goa continues to remain impacted by the mining ban in Goa.
Among metal shares, Hindalco, Jindal Steel, Sesa Goa, SAIL, Sterlite Ind were down 3% each while Tata Steel and Hindustan Zinc were down over 1.2% each on the Bombay Stock Exchange.
