The stocks of zinc manufacturing companies has been witnessing a carnage just parallel to the price of the zinc at global level. Hindustan Zinc and Binani Industries, the two primary zinc producers, have witnessed a sharp fall in their stock prices in the last almost four months beginning August 1.
The share price of Hindustan Zinc declined today to Rs 17.90 from Rs 19.55 on August 1. Similarly, the stock price of Binani Industries also fell from Rs 24 to Rs 18.65 today. Both the stocks have recovered slightly in last few days on reports that zinc prices were improving on the LME. Both the stocks of HZL and Binani had hit a low of Rs 15 and Rs 17.20 during last four months.
On the London Metal Exchange (LME), last week, spot price of zinc movied to a 10-week high crossing $780 a tonne to close the week at $ 782 from $750.50. It hovered just around 200-day moving average of $ 793 yesterday.
Hindustan Zinc and Binani Industries, the two primary zinc producers, with production capacities of 1.49 lakh tonnes and 30,000 tonnes, cater to the domestic demand of 2.50 lakh-2.75 lakh tonnes. With aggregate production levels of 1,96,163 tonnes (1,45,796 tonnes by Hindustan Zinc and 50,367 tonnes by Binani Industries), these two producers catered to 70-75 per cent of the domestic demand.
Dry cell manufacturers, the key customers of the zinc industry, may however be the benfeciaries as zinc prices have declined from the high of $1,200 in a year at current levels.
