With ALUMINIUM lagging other base metals spiral in the past year; hedge funds are eyeing this white metal as the next growth avenue for high profitability. Global investment fund houses have gradually started booking it on the benchmark London Metal Exchange.
Generally, Aluminium prices move in hand with copper, the LME market leader. The two metals compete in application industries, especially the electrical sector. But in the past year, a recovery in the US economy coupled with supply deficit forecast by the US-based International Copper Study Group, raised supply concerns, thereby offering more potential of returns on investment for fund houses.
Copper prices hit the roof about two weeks before, to surpass $ 10,000 a tonne on the LME. The red metal has recorded a gain of 36.7 per cent in the past year to February 21, to close at $ 9,829.5 a tonne. Tin gained the most, 91.7 %, in the past year, to close on February 21 at $ 32,400 a tonne, due to shortage of availability in global markets.
Tin is a metal which requires no fundamentals for price movement. ICSG had earlier forecast copper prices to hit $11,000 a tonne by the end of the current calendar year.
Solid Gains
| |||||
LME
($/tonne) |
2010
|
2011
21-Feb |
% change
| ||
19-Feb
|
31-Dec
|
YTD
|
Last 1yr
| ||
| Tin | 16,900 | 26,945 | 32,400 | 20.24 | 91.72 |
| Nickel | 20,210 | 24,960 | 29,030 | 16.31 | 43.64 |
| Copper | 7,193 | 9,739.50 | 9,829.5 | 0.92 | 36.65 |
| Aluminium | 2,072 | 2,461 | 2,532 | 2.89 | 22.20 |
| Lead | 2,289.50 | 2,587 | 2,658 | 2.74 | 16.10 |
| Zinc | 2,261 | 2,432.50 | 2,545.50 | 4.65 | 12.58 |
Source: LME
| |||||
Rising demand from the stainless steel industry helped nickel prices rise 43.6 % in the past year. Since 67 % of global nickel output is used for stainless steel production, the future of nickel depends largely upon its user industry.
Lead and zinc have surged 16.1 % and 12.6 %; Respectively to close at $ 2,545.5 a tonne and $2,658 a tonne - Respectively on the LME.
Aluminium is the only metal left behind in the race for growth in base metals in the past year, which is why global hedge funds are seriously looking at it, said an analyst with rating agency Icra.
Lifeline of Mumbaities is Local Railway. Lifeline for the world is - Aluminium, Copper, Crude, Gold, Lead,
Natural Gas, Nickel, Silver, Zinc. |
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