Hindustan Zinc Declines After Cutting Zinc, Lead Prices (1)

March 31 (Bloomberg) -- Hindustan Zinc Ltd., India’s largest producer of the metal, fell to its lowest level in a week in Mumbai trading after cutting prices.

The shares fell as much as 2 percent to 135.1 rupees, the lowest since March 24, and traded at 136.45 rupees as of 12.01 p.m. The benchmark Sensitive Index of the Bombay Stock Exchange gained 1.1 percent.

Hindustan Zinc lowered zinc prices by 1 percent to 120,400 rupees a metric ton and lead prices by 1.2 percent to 137,900 rupees a ton from today, according to the company’s website.

“The share prices are adjusting to the changes in the base metal prices,” said Niraj Shah, a senior vice-president at Fortune Equity Brokers Ltd. in Mumbai. “Zinc prices may remain weak as demand for steel will be subdued.” Shah has a “buy” rating for Hindustan Zinc shares.

Prices of zinc, used to protect steel from rusting, have fallen 3.6 percent in the past week on the London Metal Exchange. The metal traded 0.3 percent down at $2,332 a ton as of 6:55 a.m. in London.

India’s steel consumption fell for the second consecutive month in December and increased 1.2 percent in January, data from the ministry showed. Demand grew 7.2 percent in the April- to-January period, compared with a government forecast of 10 percent for the year ending today.