Even though international prices of the three non-ferrous metals – aluminium, copper and zinc have witnessed corrections of 20%, 13% and 16% respectively in the last one year, primarily due to macroeconomic uncertainties on the back of ongoing trade wars and other country-specific factors, the fundamental supply-demand balance suggests otherwise. While global consumption growth of aluminium and copper during Q1 CY2019 was muted at 1.4% and 0.8% respectively, as against 4% and 2.3% respectively in CY2018, consumption of zinc registered a de-growth of 1.3%, as against 0.3% de-growth registered in the last calendar year. Despite muted consumption levels, the markets of the three key non-ferrous metals continued to remain in deficit in this period, with shortages in fact expanding on a Y-o-Y basis, as production growth was even lower than the growth in demand. As per an ICRA note, the slowdown in production growth of aluminium and copper was in turn a result of capacity constraints, which is unlikely to improve significantly in CY2019. Production of zinc may improve in the second half of the year, which may bring the market back into a balance. In the domestic market, says ICRA, the depreciation of the rupee against the US dollar from the levels prevalent a year ago, has lent a support to base metal prices, as realisation in the Indian market is determined on an import parity basis. For copper, domestic prices received an additional support from higher spot premiums as a result of a shortage of the metal in the market.