Moneycontrol
Dec 06, 2017 11:00 AM IST | Source: Moneycontrol.com

Metals stocks lose shine on correction in commodities prices

Copper prices fell 3 percent and steel prices declined 2 percent while aluminium prices dropped 1.5 percent.

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Metals stocks lost shine on Wednesday following correction in commodities prices in international market as investors raised doubts over China demand for metals.

The Nifty Metal was biggest loser among sectoral indices, falling 1.5 percent as Hindustan Zinc, Hindalco Industries, Vedanta, Hindustan Copper, Tata Steel, Jindal Steel, NALCO, SAIL and MOIL rallied 1-3 percent.

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Copper prices fell 3 percent and steel prices declined 2 percent while aluminium prices dropped 1.5 percent.

Last week, Kotak in its report said despite disappointment on immediate closures, it believes aluminum market fundamentals are set to improve led by supply tightness building outside China, and restricted output growth in China.

The aluminum inventories outside China have fallen back to 2009 levels due to the continued supply deficit since the last six years, it added.

It feels the aluminum markets outside China will report a deficit of close to 2 million tonnes in 2017 (from 31,000 tons in 2012) due to limited supply additions and strong growth in demand—for 9MCY17, the world ex-China demand growth at 3.6 percent (to 23.7 million tonnes) exceeded supply growth of 1 percent (to 22.4 million tonnes).
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