*In the times of huge volatility in copper prices, which hit the recent peak levels in March-April this year, seems to be hampering growth of the companies that use copper as their basic ingredient. However, companies do have acted with smart moves by stock piling the inventories at lower prices of the metal.
Ratan Mardia, Managing Director, Nissan Copper Ltd is of the opinion that copper prices are purely based on demand-supply factors irrespective of speculative trading taking place in commodity exchanges. The company has been successfully achieving greater heights as he is the only one in India to manufacture copper tubes for the industrial applications in power, consumer durables, oil refinery, telecommunications, ship building etc. In an interaction with Rutam Vora of Commodity Online, Mardia maintained that Chinese factor will continue to affect copper prices in coming future and India’s copper demand will continue to rise at a speedy way.* * Excerpts:* *Commodity Online: Your profits for the year FY 2010 have jumped almost four times. Which are the factors that boosted your growth so significantly?* *Ratan Mardia: *The rise in the profits is based on stock valuations of copper. Copper prices hit peak levels in March this year, this lead to higher stock valuations reflecting a sudden hike in the profits. However, our sales operations have grown at a healthy rate, as we saw strong demand coming from our major buyers from Air Conditioners and Refrigerator makers. *CO: What is your outlook for copper prices in near term?* *Mardia: *Copper pricing in India is purely driven by demand and supply factors. If we consider next 2-3 months for price movement, looking at the global factors at play especially the European economic crisis and China’s possible copper consumption, we can expect copper prices to hover around $6500 per tonne to $7500 per tonne in near term. *CO: How do you see China factor affecting copper prices?* *Mardia: *China has been the main buyer for copper over the years. Copper pricing is purely dependent on the demand and supply factors. However, over past few months, China has been stock piling copper in a major way, affecting prices to scale newer heights. But in recent months, copper prices have been seen in a bearish trend owing to the global economic concerns. I believe that China will continue to remain key buyer of the red metal in coming days. *CO: Do you think Futures trading in copper has benefited you and companies like yours? How?* *Mardia: *Copper prices generally depend on demand supply. I don’t think futures trading on exchanges affect metal prices. We, per se, do not hedge in copper. In India copper supplies are deficient. We are heavily dependent on imports. Our copper requirements for this year stood at 15,000 tonnes annually, which will rise to 24,000 tonnes by March 2010. We buy part of our requirements from domestic miners and remaining import from overseas markets. *CO: What are the other players engaged in the similar line of business as yours and how do you differentiate yourself from them?* *Mardia: *We are the only copper tubes maker in India. We have an advantage of local presence as long as supply of manufactured products is concerned. Copper prices are so volatile in the international markets that one cannot afford to wait for several weeks to get goods delivered. Nobody knows where prices might go during that period. Considering this fact, deliver period needs to be small. India’s copper tube market is very huge, which is believed to be around 48,000 tonnes at present. Further, the market is believed to grow at an annual rate of 15-20%. Considering this, we believe that we are best placed. *CO: What is the status of the company’s new plant coming up in Khanvel? How much was the total investment of the project and how did you fund it?* *Mardia: *Our new facility for copper tubes is coming up in Khanvel, Silvassa to manufacture copper tubes for ACR and plumbing applications. This unit will produce Plain and Inner Grooved copper tubes in straight lengths, Pancake coils and Level Wound Coils, with the latest Cast and Roll technology. The new plant will be completed by August this year and we expect about Rs.75 crore to Rs.100 crore of revenue coming from this new segment in this fiscal. The installed capacity of this plant is 1000 MT per month. This plant is the first of its kind in India. We also look to export part of our production in overseas markets. With this, we aim to raise our total revenues to Rs.300 to Rs.320 crore by the current fiscal end. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
