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  1. Metal prices go through the roof as suppliers tighter

Metal prices go through the roof as suppliers tighter

Metal prices have gone off the roof in the past year as supplies tightened after closure of mines in many parts of the world and firm demand from China.

By: | Published: December 3, 2016 6:06 AM

Metal prices have gone off the roof in the past year as supplies tightened after closure of mines in many parts of the world and firm demand from China. The expectations of rising infrastructure spend by the upcoming Trump administration in the US also spurred demand.

In sync with the global trend, Indian metal prices rallied up to 70% in the last one year, even as overall inflation was largely reined in during the period. The spike in domestic prices of key metals, analysts said, could be attributed to lower base prices prevailed a year ago besides higher demand and international price rise. Steel, however, could not match the momentum — prices of the alloy saw an annual growth of just 2% — mainly due to anaemic demand amid tough competition in the global market.

metal

Zinc is at a nine-year high on falling supplies due to closure of mines and growing demand from China. Ditto for lead. Low inventories in China is fueling the price for aluminium. Copper is also moving up very fast. Steel is also getting costlier now because of growing raw materiel costs, particularly coking coal.

A consolidation in the prices is also not very far, analysts said, as additional supplies hit the market, speculations stop flying and Chinese pause for a breath. Rallies over the past few month have also run the prices ahead of the fundamentals, they said. The prices of base metal have started pulling back in the London Metal Exchange from the beginning of the current month.

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