Prices of copper cathode after the increase stand at Rs 1,18,000 per tonne and for continuous cast copper rods the price has been set at Rs 1,26,000 per tonne.

With this revision, copper prices in the domestic market are at their highest level during the current year. Copper producers review prices every fortnight and revise prices based on the previous fortnight's weighted average landed cost of copper. On June 12, copper producers had lowered prices by Rs 2,000 per tonne. Industry sources say that demand is sluggish currently but point out that this is a seasonal occurence and that there is nothing abnormal or alarming about it.

Copper prices on the London Metal Exchange (LME) have been firm over the past fortnight. Spot copper prices have been moving in a range of $1760 and $1795 per tonne during the past fortnight. Spot copper prices on the LME have recovered from a low of $1,607 per tonne on April 17 to touch $1,829 on May 18. They have since then moved lower and started recovering toward the latter half of June.

One of the primary movers of the copper price has been the massive draw down in LME stocks, which have come off almost 2,86,550 tonnes since March 7 to total 5,56,700 tonnes on June 29. The longer term outlook for copper prices continues to be bright. Analysts of copper forecast that spot copper prices will steadily move up to average $1,850 per tonne in the third quarter and $1,900 in the fourth quarter of calendar 2000. Even the treatment and refining charges (TC/RC rates), which determines the profitability of custom smelters have moved up to $80 per tonne for TC and eight cents per pound RC in the spot market for copper concentrates.

The domestic copper custom smelters viz, Birla Copper and Sterlite are to benefit most by this as they import copper concentrates and as TC/RC rates move higher, their margins for converting the concentrates into copper metal improve. Market sources say that TC/RC rates for concentrates in the long term contract market are around $65/6.5 cents and these are likely to move up too.

Reports from the international market on on negotiations for concentrates confirm the rising trend in TC/RC rates. Suppliers of concentrate are reported to be offering $70 per tonne and seven cents per pound while some are offering even $80/8 cents. However, the Japanese Smelter Pool are stuck firmly demanding TCs/RCs of $91/9.1 cents per pound.