Prices of key international non-ferrous metals are likely to remain weak in the near term due to continuing concerns over global economy, especially the weak growth outlook of China, ICRA said in a report today.
"International prices of key non-ferrous metals are likely to remain weak, at least in the near term as a result of renewed concerns regarding the health of the global economy, especially the weak growth outlook of China, which is the largest consumer of base metals in the world," ICRA said in a report here.
Additionally, the report said aluminium and copper prices would be impacted by surplus metals from fresh aluminium and copper smelter capacities that are likely to go on stream in 2015.
Also Read
"While both aluminium and zinc prices have registered corrections in the current month after seeing improvements in the previous calendar year, copper prices have largely remained under pressure since the beginning of the second half of 2014," ICRA Senior Vice-President and Co-Head, Corporate Sector Ratings, Jayanta Roy said.
A growth of almost six per cent in global aluminium consumption, coupled with stagnating production levels following curtailments of production capacities, had turned the global aluminium demand-supply position into a deficit last year.
Demand-supply mismatch in the physical market, nonetheless, continues to result in high premiums, which still provides a support to overall price levels.
On the domestic front, aluminium capacity is currently at a surplus compared to domestic consumption.
However, the utilisation rates of recently commissioned smelters would continue to be constrained by raw material and fuel availability issues, narrowing the gap between demand and supply, it said.
During 2014, world apparent copper demand is estimated to have exceeded refined copper supply.
However, ICRA said, as per International Copper Study Group (ICSG), growth in mined and refined copper production is likely to outpace demand growth in 2015, leading to a surplus in the refined copper market, which has kept copper prices under pressure since July 2014.
Zinc prices had been mostly on an uptrend since the beginning of 2014 on account of the gradual fall in zinc mine supplies.
ICRA expects this trend to continue, which is likely to limit the availability of the refined metal in the market in future as well.
However, over shorter time periods, prices would continue to witness volatility, as it has also been seen in the current month, when they declined along with other base metal prices internationally.
