How does rising metal prices affect Indian Economy?

Globally, demand of products in various sectors has surpassed supply. Copper prices have risen by 34% on the London Metal Exchange and Hot rolled coil (HRC) prices in China have increased by 44% this year. This is stoking fears of inflation in the global markets.   

The demand for industrial commodities is rising, but the restrictions aren’t easing up. This has led to a reduction in export from China. China has been unable to keep up with the demand for high-end iron ore, which means this has given India an opportunity to best their game in export.  

The supply chains are still disturbed, and the transportation issues prevail, this is pushing up industrial commodity prices. Many experts suggest that increase in prices will bring inflation for other sectors as well, like auto manufacturing, infrastructure, and real estate. Following an increase in metal prices Bajaj Auto’s commodity input costs have risen; and Tata Motors and Maruti Suzuki have increased the price of their vehicles 

Exploding metal prices are helping Indian steel companies to repay their debts. Companies like TATA stee, SAIL, and Jindal Steel and Power have cleared out ten thousand of crores worth of debt.   

Even though many companies are gaining profits from this increase in price of metal, infrastructure and construction is worried as their expenditure is constantly increasing. Analysts expect companies will reap the benefits of these spiked prices in this bull run.