HZL cuts zinc, lead prices

Hindustan Zinc (HZL), the country's largest zinc producer, lowered the prices of its products, effective Thursday, to align them with the international prices.

The prices of zinc have been brought down by 4.8 per cent or Rs 8,400 a tonne to Rs 168,000 a tonne (high grade), Rs 168,500 a tonne (special high grade) and Rs 165,200 a tonne (prime western).

Lead prices have also been cut by 3 per cent since the last revision on March 3. The price of lead after the latest revision is Rs 94,700 a tonne against the earlier Rs 97,600 a tonne.

It is the company's third price revision (the second downward revision) so far this month. On March 1, HZL had raised zinc prices by approximately 4.5 per cent due to rising international prices.

The current price revision is attributed to falling prices on the London Metal Exchange (LME). Zinc prices declined by about 5 per cent or $135 to $3,410 from $3,545 on the LME this month despite unabated fall in inventories.

Total stocks on the LME-registered warehouses reported a decline of 2,100 tonne to settle on Thursday at 91,425 tonne as compared with 93,525 tonne on March 1.

Sources believe the prices would recover very soon on the back of strong fundamentals. According to Goldman Sachs, the global zinc market is expected to remain in deficit of 40,000 tonne in 2007. Simultaneously, the Chinese demand is expected to grow at about 11.5 per cent this year compared with that in 2006, boosting the demand to at least 340,000 tonne.

Zinc prices more than doubled last year, as global supplies failed to catch up with demand from China, which accounts for a third of global use.