"There is a lot of talk going on about a downward revision in copper prices," said a marketing executive at a leading copper manufacturer who did not wish to be named.

"Because of this, buyers are keeping off the market."

Local copper prices have seen sharp price fluctuations in the last few months as demand faltered in a sluggish economy and on domestic political uncertainty.

Leading state-run producer Hindustan Copper Ltd raised selling prices for August for different copper products by about 4.5-5.5 per cent.

Copper rod prices were raised by Rs 6,000 per tonne to Rs 118,000 ($2,738.45), copper wire bar by Rs 5,000 to Rs 113,000 ($2,622.42) and copper cathodes by Rs 5,000 to Rs 108,000 ($2,506.38).

Analysts termed the hike a technical correction after July's price reductions of about 10 per cent amid increased competition.

A rising numberof private producers have entered the copper sector in the last few years.

Demand is mostly from the power and telecommunications sectors.

It imports more than 100,000 tonnes of copper annually.

"People are expecting prices to go down by about Rs 4,000-5,000 per tonne," said Jasubhai Mehta, a local trader.

An overall slowdown in industrial growth and increased local availability of copper is contributing to the fall in prices, Mehta said.

Industrial growth slowed to 6.6 per cent in 1997/98 (April-March) from 7.1 per cent in 1996/97.

The local copper industry has largely borne the brunt of the falling demand amid sharp price fluctuations, traders said.

"Sluggish demand and a drop in LME (London Metal Exchange) prices has led to expectations of a price reduction," the marketing executive said. "Lower price levels are not justified.

"In a volatile market, buyers tend to postpone their copper purchases," he said.

On Friday, LME copper was quoted at $1,639 per tonne compared to its July 31 priceof $1,700.

"Since the country has for long been accustomed to stable prices, it will take time for users to adjust to the constantly fluctuating market position," said Anil Agarwal, managing director at Finolex Essex Industries Ltd.

Finolex Essex, based Pune, is a manufacturer of continuous cast copper rods.

It is a joint venture between India's Finolex Cables and Essex Group Inc, a subsidiary of the US's Essex International.

"It is baffling that between April-June 1998, the three-month average prices of copper on the London Metal Exchange fell by 7.7 per cent to $1,637 per tonne," the Minerals & Metals Review (MMR) said in a weekly report.

"On the other hand, indigenous producer prices went up sharply by 13.4 per cent to 126,333 Rupees per tonne in June 1998 from April."