Zinc prices pick up LME cue,spiral downwards
Zinc price in India has been declining over the past few weeks largely tracking the price movement on the London Metal Exchange (LME).
By Deepa Krishnan, TNN |
MUMBAI; Zinc price in India has been declining over the past few weeks largely tracking the price movement on the London Metal Exchange (LME). The two main producers of zinc, Hindustan Zinc and Binani Zinc, set the price of the metal in the physical market, on the basis of the average weekly price on LME. Hindustan Zinc reduced its price twice last week, by Rs 5.50 per kg last Saturday to Rs 224.70 per kg (Rs 2,24,700 per tonne), following a Rs 3.20 per kg cut last Thursday.
This would augur well for users of galvanised steel as it would mean a reduction in prices. Zinc is a major component of galvanised steel, with more than 70% of the metal going into the latter’s production. For a major part of the year, zinc prices have been on an upswing, hitting an all-time high of close to $4,600 per tonne on the LME in November owing to rapidly diminishing stocks which have fallen by over 70% in 2006.
India’s zinc consumption is rising, expected to touch 4.6 lakh tonnes in the financial year ending March ‘07, from last year’s 4 lakh tonnes according to the India Lead Zinc Development Association (ILZDA). Galvanised steel is finding increasing demand in areas requiring infrastructure upgradation.
“In recent times, Hindustan Zinc has stepped up its capacities almost at a rate of every alternate year since 2002. The next addition of about 1.75 lakh tonnes, over the existing 4.1 lakh tonnes per annum, should be operational by the end of 2007,” said ILZDA executive director L Pugazhenthy. As a result, India is almost self sufficient in zinc production, and the supply demand mismatch is not as severe as in many other countries like China, which accounts for about 30% of the global zinc consumption.
Due to the favourable zinc prices and ample capacity additions matching the demand pattern, it would be attractive to export zinc in the next few years. The At the same time, India’s zinc imports have also declined to roughly 50,000 tonne from over 1 lakh tonne last year.
This would augur well for users of galvanised steel as it would mean a reduction in prices. Zinc is a major component of galvanised steel, with more than 70% of the metal going into the latter’s production. For a major part of the year, zinc prices have been on an upswing, hitting an all-time high of close to $4,600 per tonne on the LME in November owing to rapidly diminishing stocks which have fallen by over 70% in 2006.
India’s zinc consumption is rising, expected to touch 4.6 lakh tonnes in the financial year ending March ‘07, from last year’s 4 lakh tonnes according to the India Lead Zinc Development Association (ILZDA). Galvanised steel is finding increasing demand in areas requiring infrastructure upgradation.
“In recent times, Hindustan Zinc has stepped up its capacities almost at a rate of every alternate year since 2002. The next addition of about 1.75 lakh tonnes, over the existing 4.1 lakh tonnes per annum, should be operational by the end of 2007,” said ILZDA executive director L Pugazhenthy. As a result, India is almost self sufficient in zinc production, and the supply demand mismatch is not as severe as in many other countries like China, which accounts for about 30% of the global zinc consumption.
Due to the favourable zinc prices and ample capacity additions matching the demand pattern, it would be attractive to export zinc in the next few years. The At the same time, India’s zinc imports have also declined to roughly 50,000 tonne from over 1 lakh tonne last year.
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