Following the fall in the prices at LME in the subsequent months, the losses incurred by these Chinese dealers had become unbearable. In the process the metal had lost much of its sheen.

But now things look somewhat rosy and the market expects the zinc metal being quoted at around 1050 US dollars per tonne after it had touched the level of 1030 US dollars per tonne in March last.

``The demand is now picking up'' says chairman and managing director of Hindustan Zinc Ltd, KVK Seshavataram. The latter's share in the domestic market has risen to 57 per cent as against 52 per cent in the previous year. ``We are working on a scheme so as to keep our share in the domestic market at around 60 per cent,'' saysthe chairman.

In other words the country's demand of zinc metal (to the extent of 40 per cent) will continue to be met from exports in the coming years. And the global scenario in regard to the consumption of zinc metal is certainly looking up.

Used mainly in the galvanising industry, zinc metal has thus seen many a upheaval in the international market. ``The trading is quite risky,'' admits a leading businessman.

The domestic demand of the metal has been rising by about 5.80 per cent per year and if the present trend continues, the demand may even rise by 6 per cent this year. ``We are gearing up our sales so as to meet the rising demand,'' says Seshavataram.

Seshavataram, however, admits that the margins have fallen but still the business is quite paying. Moved by the business economics, HZL has firmed up plans to put up a super zinc smelter in Rajasthan at a cost of Rs 1150 crore with an annual capacity of one lakh tonnes.

What is important to note further is that the existing smelting capacitiesof its smelters at Debari and Vizag are being raised by 10,000 tonnes each to reach a combined level (of production) of 95,000 tonnes per year from the present 75,000 tonnes.

The whole idea behind the expansion and the creation of the new capacity of one lakh tonnes is to keep HZL share in the domestic market at around 60 per cent per year.

Apart from zinc, HZL also manufactures silver, lead and cadmium. However the share of the zinc in its sales continues to be over 80 per cent, says the chairman.

Last year was certainly not a good year for HZL as the zinc metal took a beating by about 25 per cent compared to previous year. This was the reason why its profitability also dipped to Rs 150.15 crore from Rs 201.77 crore in the previous year.

To the good fortune of HZL, it has been given the country's best mines of zinc and lead at Ranpur-Agucha in Rajasthan where the metal content has been found to be around 13 per cent. The mining capacity of the mines is being raised to 6000 tonnes per day from theexisting 4500 tonnes per day at a cost of Rs 200 crore.