MUMBAI: Zinc Futures strengthened anticipating rise in demand in the next financial year. Prices of Zinc Futures rose marginally on the MCX following reports of the increase in the demand of steel as the infrastructure activities pick up pace.
It is felt globally that recession is a time to get the infrastructure projects going. In building infrastructure projects, the economy gets wider as more and more money get rotated creating more employment opportunities and more need for infrastructure related raw materials.
Country's largest zinc producer, Hindustan Zinc Ltd (HZL) declared that it would increase its production on the possibility of rise in demand. As a result, stock prices of HZL have seen an upward swing on the BSE. Stock touched its intra-day high of Rs.341 and settled at Rs.333 up by nearly 2% in the afternoon session.
However, company, which exports about 20 percent of its output, had announced price cut in zinc by Rs.800 to Rs.68,900 per tonne with effect from 31st January, 2009, only a fortnight after its previous announcement of price cut by Rs.1400 to Rs.73,300 per tonne on January 15 when the company stock traded at Rs.355 on the BSE.
Zinc consumption slackened due to slowing construction activity and weak sales of autos and consumer goods. However, as fallout of the directives by the central government to the states to speed up developmental construction activities, the demand for steel is anticipated to rise, which would prove as a booster for the zinc production too, which is used in producing galvanized steel.
http://www.commodityonline.com/news/HZL-prices-firm-on-anticipated-zinc-demand-14857-3-1.html
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