"Indian producers have been keeping prices well below the import costs and that has paid off. Zinc, for example, is being sold at Rs 70,000 per tonne whereas imports will work out to be a couple of thousands of rupees above that," says Sharad Parikh, president, Bombay Metal Exchange. Throughout the last week, nickel, zinc and lead prices remained steady. The metals did gain in line with some strong LME advices. Aluminium, however, bucked the trend to lose about Rs 100 at Rs 8,600 per tonne last week.

"Zinc at Rs 70,000 per tonne and nickel at Rs 25,500 per tonne are here to stay as both the metals have seen the bottom," Sharad adds. He says that the Indian buyers have waited enough and are showing an active interest inpurchases.

"The buyers have been waiting for the last six months. Nobody is expecting any further fall as evident from the fact that both the zinc producers - Hindustan Zinc and Binani Zinc - are selling at comfortable levels. Importantly, they have tuned to the market well and are only supplying the quantity it wants," Sharad quips.

The metal producers, including Hindustan Copper, Sterlite and Birla Copper are expected to fine tune prices in the next 15 days. He, however, said that although the domestic market was bound to be calm next week, all depended on how LME traded next. "Last week, most of the metals on LME gained handsomely which could be the trend to come," Sharad says.

In fact, LME copper, nickel and zinc saw gains in the $10-20 per tonne range last week.

A look at aluminium prices shows that the metal has been steady at Rs 6,350 per quintal against last year's Rs 6,250 per quintal. Copper has been somewhat steady at Rs 11,350 per quintal against Rs 12,825 last year. Zinc has improvedremarkably from last year's crisis period to stay at Rs 7,350 in October this year. Late last week, nickel gained Rs 400 on a single day while tin was up by Rs 300 to close at Rs 38,500 per quintal.

In fact, October was a disastrous period for zinc, which crashed to a four-and-half year low of $942 per tonne. But the recovery was brisk and funds competed with each other to pick up the metal to $978-985 levels in a span of four days. At present, the metal trades in $972-980 range.

Metal prices in general breathed a sigh of relief as a flood of good news struck the markets. Markets welcomed US election news as president Clinton's worries were somewhat alleviated with his Democrats doing well in both houses. The market was glad to shrug off moderate rises in LME warehouse stocks while an increase in Chinese copper exports did not influence the prices since it had already been widely factored into prices.

However, analysts with an Indian broking firm said that the Chinese refined zinc exports are bound tofall in the next few years with the consumption likely to pick up on an economic recovery. China exports mostly to Asian countries including Japan.

Aluminium was a bit softer last week while zinc quickly gathered momentum, shrugging off a 3,100-tonne rise in LME stocks. Lead stayed firm at below $490 per tonne while nickel materialised on news that the production at French producer Eramet's new Caledonia deposits were hampered.

The depressed scenario seemed to be subsiding for the moment at least as major buyers, Japanese trading houses are in an effort to import zinc from China under next year's GPS (generalised system of preference), likely to amount 50,000 tonnes.

Premiums for Chinese special high grade (SHG) zinc have edged up by $5-10 in the last few weeks to $25-30 per tonne FOB China basis. However, Japanese zinc smelters are known to have high inventories.

The fear is that any gains made by yen would eat into the profits of smelters who hitherto had a good time on weak yen.

Japan'sSeptember zinc exports totalled 6,822 tonnes, down from 8,882 tonnes in August but well above the monthly average of 3,371 tonnes so far this year, according to an official data.

In aluminium, funds had been busy covering short positions, by buying December and January calls. While increased use of copper wire by transport industry in particular has reflected in an impressive growth in the US.