Rising Prices May Make Cars, Durables, Houses More Expensive
Agencies & Our Bureau MUMBAI
COPPER, aluminium, steel and crude oil prices rose on Tuesday raising the spectre of yet another round of price increases from automobile, durable manufacturers and higher prices for new homes as companies pass on the burden.
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. Gold, a popular hedge against inflation, rose to $1,129.60 an ounce — the highest since December 17, according to Bloomberg.
"Prices of consumer-related goods will go up as commodity players, including steel who had cut production, are now seeing a rise in demand,'' said Jatinder Mehra, a director at the Essar Group. "The production-demand mismatch will keep prices firm," he said. The demand for goods are soaring, as the government has cut taxes to boost economic growth following the credit crisis, and RBI has kept policy rates at record low, making it easy for consumers, but pushing up overall prices. Carmakers have already hiked 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 stateowned 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%.
But investors cheered the soaring prices pushing up the shares of National Aluminium, Hindalco Industries, Tata Steel and SAIL as they expect these metals company to benefit from higher prices.
The BSE Metals Index was the best performer among various indices with it gaining 3.82% to close at 18,391 on Tuesday.
JSW Steel and National Aluminium rose over 10% while Hindalco advanced 7%, copper maker Sterlite Industries gained 5% on BSE.
ADDED SHINE
No comments:
Post a Comment