Hind Zinc jacks up tags by Rs 2,400

The country's largest lead and zinc manufacturer Hindustan Zinc Ltd has raised its products' prices by Rs 2,400 across all varieties. This is the eighth time that the metal major has revised its prices in the last two months.

With the latest hike, the special high grade (SHG-99.99) prices rule at Rs 1,21,700 per tonne (ex-Debari). Interestingly, this variety has witnessed a price surge of 12 per cent in just two months.

The ex-Debari high grade (HG-99.95) is now priced at Rs 1,21,500 per tonne while prime western (PW-98.5) is at Rs 1,19,700 per tonne.

The upward revision comes despite a customs duty cut to 7.5 per cent (10 per cent) announced in the budget. Domestic zinc move in tandem with the international market where strong fundamentals are pushing up the prices consistently.

On the London Metal Exchange, spot zinc jumped to $2,303 yesterday from $1,912 on January 3. Closure of mines in Australia and a likely deficit are the reasons being cited for the price surge.

Meanwhile, inventory in the last two months declined to 3,29,675 tonne from 3,93,530 tonne in the beginning of the year. Supply to warehouses registered with LME thinned to 1.73 lakh tonne on February 28 from 2.91 lakh tonne on January 3. This indicates that the demand for the metal is on the rise globally, while production is sharply declining.

The developments in the international markets have a direct bearing on the domestic front.

According to Macquarie Research, the global zinc shortage, stemming from the closure of Xstrata Plc's McArthur River mine in Australia's Northern Territory, is expected to linger till the end of the decade. Xstrata, a natural resources major based in Switzerland, has a significant share in the global zinc market.