Aluminium price rise to hit car makers

MUMBAI (Commodity Online): Rising base metals prices have come as a ampener for several companies like automobile and durable manufacturers. Even as India is set to witness a boom in auto market, the competitive pricing may be hit by the rise in prices of aluminium and copper prices. Aluminium futures in Shanghai climbed to 17,555 yuan a tonne, their highest level since September 2008, copper futures for March was at $3.3935 a pound, near August 2008 highs, and crude oil traded near a 14-month high at $81 this week. This will cause a rise in prices of consumer-related goods. The demand for goods are soaring as the governments have cut taxes to boost economic growth following the credit crisis, and the RBI is keeping the policy rates at record low making it easy for consumers, but pushing up overall prices. Some economists expect rollback of easy monetary policies and stimulus this year as policymakers may stare at demand-led inflation. Carmakers such as General Motors, Toyota and Fiat have raised prices in India in the past few days after a recent surge in prices of commodities such as steel. More companies are expected to follow, such as real estate developers, who are facing higher cement prices too. Most steel producers have raised prices of the metal with the average price of hot-rolled coil now at Rs 32,000 per tonne. Tata Steel raised product prices by Rs 2,000 last month. The state-run National Aluminium may raise prices soon, following China’s Aluminium raising of alumina prices 5.7%, the third increase in five months, and the price of aluminium by 7.8%.