The prices of base metals lost their shine over the past year as supplies recovered after earlier disruptions and rising input costs and increased availability of raw materials also played their part. The supply of global base metals will remain tight in calendar year 2023, industry experts opine, due to supply issues and low inventory position. In the past one year, the prices of most base metals – including aluminium, copper, nickel, iron ore and hot rolled coil (HRC) steel – were trading lower by up to 40.3% on the London Metal Exchange (LME), Commodity & Energy Exchange (CMX) and Multi Commodity Exchange of India (MCX). According to ICRA, global prices of base metals contracted by a steep 18-28% in FY23, compared with the record highs in March 2022, amid considerable volatility. Although the fiscal commenced on a healthy note, the metal prices witnessed significant headwinds in Q2 and Q3 of FY23 given an uncertain global economic outlook and demand slowdown in China. With China reopening, some positive sentiments built up in January this year, when metal prices touched almost their six-month high. However, the rally was short-lived as metal prices plummeted again in February and March 2023, owing to uncertainty over the strength of China’s recovery and continued weak global sentiments, it added. In the year-ago quarter, aluminium prices rallied after the start of the Russia-Ukraine war and averaged at about $3,275 a tonne on LME. However, it began dipping in FY23, and by the fourth quarter of FY23, aluminium prices were down 27% at $2,395 from the previous year. According to Jayanta Roy, senior vice-president and group head, corporate sector ratings at ICRA: “While Chinese apparent consumption slightly improved in Q4 CY2022, the global demand outlook of base metals remains uncertain, and would hinge on the housing sector recovery in China and improvement in global sentiments.” Globally, the base metals supply is expected to remain tight in calendar year 2023, owing to persistent supply issues, resulting in a low inventory position. In CY2022, there was an aluminium production cut in China’s Yunnan province, owing to power related issues, while copper supply was also hit owing to geopolitical issues in Peru.