March 202012METALWORLD

Non-ferrous Metals Dip on Slow China Demand

The outbreak of Covid-19, or

novel Coronavirus, has put

pressure on non-ferrous metals

aluminium and copper, with analysts

forecasting a weak last quarter for

Indian producers.

Aluminium and copper prices have

dropped nearly 5% since the outbreak

on January 21, to trade at Rs 138.10

per kg and Rs 430.30, respectively, on the MCX.

Similarly, LME prices of aluminium fell to $1,676 per

tonne from $1,810 on January 21, while copper slipped

to $5,701 from $6,158 a tonne in the same period.

“China being the major consumer of metals, the

outbreak has put a stop to major manufacturing and

import, which is likely to have a major effect on the entire

supply chain, reducing demand from January to March,”

said AkshayAgarwal, managing director, Acumen

Capital, adding that the brokerage maintains a bearish

outlook on the metals market overall.

Companies are likely to take a hit on exports and see

profit margins shrink due to falling prices, analysts said.

The impact is, however, largely

expected to be confined to the current

quarter, as prices recover in medium

term, they said.

“Non-ferrous companies will

continue to slide in Q4, with China

battling Covid-19. Average aluminum

price is down by $10, alumina by $7

and zinc by $101 on a quarterly basis,

reflecting the continued weakness in the sector,” said

senior research analyst Vishal Chandak of Emkay Global

in a recent report.

Hindalco Industries, the largest producer of aluminium

and copper, said the outbreak has not hit numbers but

may get affected by its purchase of US-based aluminium

rolled products maker Aleris. “We have downgraded

Hindalco from ‘buy’ to ‘hold,’ reflecting muted to lower

aluminium prices and increasing likelihood of Aleris

acquisition without automotive body sheet plants, which

will make the acquisition value-expensive in the short

run,” said the report. A lower premium on physical

aluminium may impact Novelis’ profitability.

The Odisha State Government approved two

investment proposals worth Rs 563 crore at the

State Level Single Window Clearance Authority

(SLSWCA) meeting. The proposed units will create

employment opportunities for 1,273 people. The

approved projects were in plastics and downstream

aluminium sectors.

Official sources said the SLSWCA approved the

proposal of Glen Industries Pvt Ltd to set up plastic food

containers and moulded paper products manufacturing

unit with an annual capacity of 9,261 tonnes with a total

investment of Rs63 crore. The unit will provide

employment to 273 people.

In a big boost to the State’s aluminium downstream

sector, the SLSWCA has also approved the proposal of

Jindal Aluminium Limited to set up a 75,000-tonne

capacity aluminium extrusions plant with an additional

investment of Rs500 crore. It will provide additional

employment opportunities for 1000 people.

Odisha Govt. Clears JindalAluminium Project

The Supreme Court sought the CBI's response on

providing a copy of its probe report closing the

preliminary inquiry into the disinvestment of the

government's share in PSU Hindustan Zinc Limited in 2002.

A bench headed by Chief Justice S A Bobde took note

of the submission of lawyer Prashant Bhushan, appearing

for an association of officers related to the PSU firm, that

there were corrupt practises in divesting government

shares in Hindustan Zinc Limited during the NDA regime.

On being told by Solicitor General Tushar Mehta that

preliminary inquiry into the case has been closed, the

bench asked him to apprise the court whether it can

provide a copy of its closure report to the complainant

which has alleged corrupt practices in the deal.

In 2002, the Centre had decided to divest its

controlling shares in Hindustan Zinc Limited and a PIL

was filed in 2013 seeking CBI probe into the deal and

restraining the government from further divesting its

share in the PSU firm.

SC Seeks CBI Probe Report intoDisinvestmentof Hindustan Zinc

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