P Parvthisem told The Financial Express that hedging which was being thought of an option would be implemented with enough caution. "This would be a mode to avoid speculation in prices", he said.

Industry observers opine this would help the copper company to post better margins, especially as most of the other copper manufacturers in the private sector have started resorting to the practice of hedging.

During the last few years, LME copper price has been on a continuous slide. The LME average which was as high as $2844 a tonne in 1995-96 came down to $ 1580 during 1998-99. In the last four months of the current fiscal, the average has been $ 1466.

Analysts attribute this low price due a number of factors, the most important being the economic slowdown in the Asian region which contributes toalmost 38 per cent of the world copper demand. China alone is said to contribute about 17 per cent of the global demand.

Moreover, mine closures all over the world have also contributed to low prices of the commodity. There has been a significant reduction in mine capacity at Highland Valley, BHP, Falconbridge, Phelps Dodge, Asarco etc.A forecast made by Simon Hunt Strategic Services suggests that increased demand would see a reversal of prices in the days ahead. It suggests that in the year 2000, the LME would cross the $ 2,000 mark--the prices are forecasted to be in the order of $ 2015, $ 2242 and $ 2065 in the years 2000, 2001 and 2002 respectively.

"But that is a long way, considering the fact that Hindustan Copper is going through the most troublesome times currently and possibly a break-even price of $ 2250 on the LME could help the company see better times. This too, has to be possible only when all the company's mines work to full capacity", said Parvathisem.

Commenting on the consumption ofcopper in India, the CMD said that the demand and consumption of the commodity in the country has been very poor, the per capita being only 0.3 kg compared to 10 kg in many of the developed countries of the world.

HCL which once used to meet almost 25 to 30 per cent of the demand for copper in India has now being supplementing its shortage through import of copper concentrates which are economising heavy costs incurred on account of unviable mines and a huge workforce. It may be noted that post liberalisation with removal of various controls, private sector players like Birla Copper and Sterlite Copper have put up integrated copper production facilities. Unlike HCL, both the investors have put up plants based on imported copper concentrate as feed material taking advantage of the assured duty differential between raw material, i.e concentrate and finished copper.