Private producers, Sterlite Industries (India) Ltd and Birla Copper hiked prices of continuous cast rods by Rs 3,000 per tonne to Rs 120,000. The two producers raised cathode prices by Rs 2,000 per tonne to Rs 113,000.Hindustan Copper is likely to follow suit shortly, traders said.

According to market sources the average London Metal Exchange (LME) copper prices rose about $30 per tonne in the last fortnight of September. On September 30, three-months copper futures rose to end at $1,790 per tonne. Copper producers had increased selling prices for both products by Rs 6,000 per tonne in the second half of September due to the firm trend on the LME.

Earlier in a cyclical manner Hindustan Copper Limited and Hindustan Zinc Ltd, the two major non-ferrous metals manufacturing and trading companies slashed prices of various metals in Julythis year. A steady decline in LME copper prices and the depreciation of rupee against the dollar forced the copper giant to drop prices of various products. Copper wire-bar was slashed by Rs 2,500 per tonne at Rs 117,500 and wire-rod by Rs 1,500 per tonne at Rs 11,900. The price of cathode had also been reduced by Rs 1,000 per tonne. Similarly, Hindustan Zinc had decreased the price of zinc by Rs 1,000 per tonne while maintaining the price level of lead.

According to market sources the price reduction or hike in various non-ferrous metals are expected with the volatility in the international market as price trend in the international market has its impact on the domestic market.

India fulfills the domestic demand of these metals mostly through imports and thus the trend at the LME has an immediate impact on the local market. According to some analysts the insertion of differential duty structure for the import of finished copper products and raw materials which had the desired impact on imports of themetals. The finance minister had fulfiled traders' demand and introduced a duty of 30 per cent on wrought copper (raw material) and 35 per cent on finished product, wrought copper.

The duty differential, abolished in 1996-1997, put the Indian industry under severe stress which led to enormous losses. The Indian industry had to compete with international producers on various counts including higher interest rates, higher power tariffs, high scale of economies internationally and high state and other local levies. The net effect of these resulted into a switch over to imported finished products which in turn put local manufacturers of sheets, tubes, strips, foils, forgings etc. at a disadvantage.