Hindustan copper Limited and Hindustan Zinc Ltd, the two major non-ferrous metals manufacturing and trading companies have slashed the prices of various metals for the month of July. A steady decline in the copper prices at LME (London Metal Exchange) and the depreciation of rupee against the dollar have forced the copper giant to drop prices of various products.The price of copper wire-bar has been 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 has also been reduced by Rs 1000 per tonne. Similarly, Hindustan Zinc has 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 in various non-ferrous metals was expected as the declining price trend in the international market had its impact on the domestic market.
India fulfils the domestic demand of these metals mostly through imports and thus the trend at the LME had an immediate impact on the localmarket. The past week had witnessed several economic and political developments in the Asian countries which had a notable impact on the international prices of copper, zinc, nickel, tin and aluminium.
According to some analysts the insertion of differential duty structure for the import of finished copper products and raw materials has also had the desired impact on imports of the metal. The finance minister in his recently announced budget 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 productswhich in turn put local manufacturers of sheets, tubes, strips, foils, forgings etc.
at a disadvantage. Many units shut down to avoid further losses and a few also trimmed staff to cut losses. The Raja Chelliah Committee had suggested a differential duty structure on copper products to remove the anomalies faced by the domestic industry vis-a-vis international suppliers way back in the early 90's.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
