HZL hikes prices after 2 cuts on trot

After two subsequent price cuts, the country's largest zinc producer Hindustan Zinc (HZL) raised selling prices of its zinc products by Rs 300 a tonne effective from last Saturday. This was the company's sixth revision so far in this month.

The change in sentiment took HZL just a couple of days to revise the prices upwards, in tandem with the movement on the London Metal Exchange (LME).

Earlier, the company cut product prices by Rs 12,700 a tonne across the board effective from November 16 in line with the LME. It had also slashed zinc prices by Rs 200 a tonne in its previous revision on November 11.

With the latest revision, HZL is quoting the high-grade zinc at Rs 2,21,000 a tonne, while special high-grade and prime western zinc are sold at Rs 2,21,500 a tonne and Rs 2,18,200 a tonne respectively.

In order to bring the domestic prices on par with the global, HZL revises its product prices as and when any major change takes place on the LME.

Spot prices of zinc today plunged to the month's low at $4,090 a tonne in early trade but recovered to close at $4181.5, still about $365 lower than the month's peak at $4,545 on November 7.

In the spot market, zinc slab today fell sharply to Rs 225 a kg from the Rs 238 a kg level towards the end of the first fortnight of this month in the Mumbai non-ferrous metals market.

The current recovery is mainly attributed to the drastic decline in inventory levels, which today slumped by 1,150 tonne to a record low level at 90,400 tonne on the LME. This was the lowest inventory level since April 1991, an analyst said.

Zinc has been buoyed by rising demand from China, the world's largest consumer of the metal. Consumption in the world's most populous country rose 7 per cent in the first nine months, according to the government-funded ILZSG.

Demand in the US, the second-largest consumer, increased by a higher rate of 8 per cent.

According to a report by the International Lead and Zinc Study Group, the global zinc market was in a deficit of 3,04,000 tonne between January and September.

Zinc production rose to 7.904 million tonne during the first nine months of 2006, up 3.7 per cent over the same period last year, while consumption rose more strongly to 8.208 million tonne, up 4.3 per cent.