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Suresh P. Iyengar

Zinc, copper, nickel, lead set new records on LME

Mumbai April 5 Continuing its dream run, metal stocks on the BSE posted smart gains on the back of firm metal prices in the international markets. Prices of base metals such as zinc, copper, nickel and lead all set new records on the London Metal Exchange (LME) last week.

Hindustan Zinc jumped 4.7 per cent to Rs 647, Hindustan Copper up 5 per cent to Rs 93.85 and Hindalco rose 1.34 per cent to Rs 132. Among steel companies, Tata Steel gained 6.16 to Rs 465, Jindal Stainless Steel 2.95 per cent to Rs 122 and SAIL 2.23 per cent to Rs 114.

"Metal stocks are headed for good times. China has been encouraging value-added metal export rather dumping it in raw form. This has created a shortage of metals in the international markets pushing prices to a record high," said Mr Vishal Chandak, research analyst (Metals), Emkay Share and Stock Broking.

Nickel

In the LME, nickel rose for the third consecutive day on the back of dwindling supplies. Nickel for delivery in three months gained $250, or 0.5 per cent, to $49,650 a tonne. Earlier, it touched a high of $50,000 a tonne. Inventories of nickel, monitored by LME, fell 312 tonnes, or 6.1 per cent, to 4,812 tonnes. It is the biggest one-day drop since March 8, bringing the decline in the past year to 85 per cent.

"The metal, used in stainless steel, has risen 50 per cent this year, posting the largest increase among the seven industrial metals traded on the LME. There is a strong demand from stainless steel manufacturing companies," said Mr Harish Gallipalli, Head of research, Karvy Comtrade.

Lead

After hitting a record high of $2,010 per tonne on Wednesday, lead dropped $10 to $2,000 a tonne. Similarly, copper dropped $5 to $7,410 per tonne. It gained over 8 per cent in the last three weeks.

Zinc

Zinc on Friday hit a record high of $2,715 per tonne. However, it lost $70 to $3,430 per tonne on Thursday. Inventories in LME-registered warehouses have declined by 27 per cent since the beginning of the year, while price rose by 42 per cent in the same time period and more than doubled in the past six months. The prices could go higher, since production is not expected to increase for the next couple of years, said an analyst.

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