Global rally ignites home trades

MARKET REVIEW/NON-FERROUS METALS

The domestic non-ferrous metal market has zoomed up in the last fortnight following a spiralling international trend.

Copper reached new 8 year high, tin hit a new 7 year high and nickel reached new 14 year highs on the London Metal Exchange (LME), igniting a rally home. Tin also jumped in the domestic market.

Since November 15, copper heavy scrap has zoomed up from Rs 129 to today's close of Rs 141, copper utersil scraps jumped from Rs 115 to Rs 124 and copper wire bar shot up from Rs 149 to Rs 162. Price of tin slabs rose from Rs 372 to Rs 418 while nickel cathodes gained from Rs 765 to Rs 915.

During the last fortnight the price of brass utersil scraps edged up from Rs 89.50 to Rs 97 and brass sheet cutting from Rs 94.50 to Rs 102.50. Price of aluminium utersil scrap increased marginally from Rs 74 to Rs 75 and aluminium ingots gained from Rs 95 to Rs 97.

Price of zinc slabs appreciated from Rs 75 to Rs 76 and lead ingots gained from Rs 45 to Rs 46. On the National Multi Commodity Exchange (NMCE) the futures prices in all base metals jumped with higher volumes.

In the international markets on Monday, copper moved up to $2,270/272 from $2,240.50 at the last kerb close, gaining a fresh 6-1/4 year peak last reached at $2,248 ten days ago.

Red metal futures rose in thin Asian trading following gains in Shanghai. Initial resistance is offered at $2,300 with $2,338 reached in August 1997, Reuters reported.

Benchmark three-months nickel jumped to $16,250/16,300 a tonne at 1050 GMT, up from $15,750 last traded before the LME closed last Wednesday for the Christmas holiday. Prices were at their highest since April 1989.

Aluminium strengthened to $1,594/596 versus $1,589 in London last Wednesday. The LME said last Monday its investigation into the aluminium market had uncovered evidence of a form of collusion and misconduct by non-LME members, and that it had referred findings to Britain's Financial Services Authority (FSA).

Light buying in Asian markets on Monday helped lift lead and tin, traders said. Zinc was marginally up at $1,010/12 versus $1,003, while lead edged up to $709/712 from $703, a high last seen in March 1997.

Tin prices stood at $6,410/440 a fresh 7-1/2 year high against $6,330.

Internationally, copper smelters are expected to see another difficult year in 2004 as the world concentrate market is likely to remain tight despite increased concentrate output.

Although world concentrate output could rise by an equivalent of 500,000 metric tons copper metal in 2004, that won't dispel completely the problem of concentrate tightness.

On the other hand, like all commodities traded in the currency, depreciation of the greenback (US $) generally brightens copper's price outlook by making it cheaper for non-US consumers to buy, and discourages, to some extent, non-US producers from raising output.