Non-ferrous metal prices to remain firm next quarter

　　There is a widening supply deficit, largely as aresult of production setbacks across three key non-ferrousmetals, aluminium, copper and zinc, despite muted consumptiongrowths in copper and zinc, an Icra report said today.

　　This has left international non-ferrous metal priceselevated in the current calendar year, which have jumped by24-35 per cent in the last one year.

　　"While global aluminium production has witnessed ade-growth in the last few months due to the regulatory stepstaken in China to control production from polluting sources,copper and zinc output has suffered from issues in mining,production and degradation in the quality of ore," it said.

　　According to Icra, "supply situations are unlikely toimprove in the next three months. Consequently the deficitsare likely to persist, which in turn would keep priceselevated in the near-term."

　　Higher prices augur well for manufacturers as animprovement in realisation on metal sales has helpednon-ferrous metal entities register improved business returnsduring the January - September 2017 period, however, it islimited by a simultaneous increase in input costs.

　　The impact of rising input costs is higher fornon-integrated players manufacturing aluminium, as there hasbeen a sharp increase in alumina prices.

　　As for the domestic demand-supply scenario,consumption of aluminium, copper and zinc, grew 7-9 per centgrowth in the first half of the current fiscal.

　　Despite this, domestic production remains in excess of consumption. The situation is likely to persist going forward as well, which should drive exports.