Currently, on the London Metal Exchange (LME), copper is traded in the range of $1,750-1,800 per tonne. In the domestic markets, copper wire bar is quoted at Rs 1.20 lakh per tonne.

Confident of buoyancy in copper prices, domestic copper manufacturers too raised their respective prices effective from October 1. Both Sterlite and Birla Copper, had increased their prices of continuous cast rods (CC rods) by Rs 3,000 per tonne to Rs 1,20,000. These producers also raised cathode prices by Rs 2,000 per tonne to Rs 1,13,000 per tonne.

Further, copper producers have already increased selling prices for both the products by Rs 6,000 a tonne in the second-half of September due to the firm trend on LME.

Copper prices have been hovering at their low levels coupled with depressednon-ferrous metals prices, mainly on higher copper smelting capacities than demand. The prices however, began inching up only in early September, mainly after the talks of the merger, which began in the US.

The merger of two copper majors in the US is likely to help copper prices remain firm and domestic prices going up cannot be ruled out from this stage. The fiscal 1999-2000 will be financially good for Indian manufacturers as operating margins are expected to move up by at least 3 per cent due to the price rises on a conservative estimate.

The "friendly" merger could be the most needed tonic for copper, which is emerging from its hibernation.

Last week the three month copper prices on the LME have crossed $1,800 per tonne and the merger is expected to hike international prices still further. Copper prices were projected to be around $1,762-1,872 per tonne by 2001. However, this targeted figure of $1,800-plus has already been achieved. The prices of copper are expected to move further up, as thepresent prices do not look fully discounted.

Another good reason for the prices to move up could be the fact that after the friendly merger, Phelp Dodge will try to acquire Asarco, another copper company.

It must be recalled that Phelps Dodge had taken a decision to launch an unfriendly bid worth a $2.6 billion for Cyprus Amax and Asarco, who are smaller when compared to Phelps Dodge(before the recent merger). Earlier, Cyprus Amax and Asarco were planning a $2 billion "friendly" merger.

Together the copper smelting capacity of Cyprus and Asarco capacity was expected to be around 2 billion pounds. Phelps Dodge has a capacity of 1.7 billion pounds.

After the merger, Asarco has become the prime target for acquisition for the merged company. Phelps Dodge is seeking to buy Asarco in cash and stock deal valued at $989 million or $24.86 per share. If Asarco joins the bandwagon, effect of this will be positive on prices. Though analysts refuse to point out where prices will be at the end of the year.