India Turned To Be A Net Importer Of Copper

By Author: Guna Seelan
Total Articles: 4
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As expected, India has turned out as an importer of Copper for the first time after 18 years. The main reason behind the change is the permanent closure of Vedanta's Copper Smelter in Tuticorin.

Copper – The Most Used Metal:

Copper is considered to be the third most used metal after Steel and Aluminum. Copper is an essential ferrous base metal used in a wide range of applications including motor manufacturing, wiring, radiators, connectors, etc. The following are the major manufacturing companies that play an important role in Indian Copper Sector.

1.Hindustan Copper Limited - Public Sector Company

2.Hindalco Limited- Private Sector Company

3.Vedanta's Sterlite - Private Sector Company

Fall in production:

According to the Research Analyst, the domestic production of refined copper had grown CAGR of 9.6% during FY 2014-2018. During FY19, the production of copper fell by 46.1% due to the permanent shutdown of the Sterlite Plant on 28th May 2018, by the Tamilnadu Government. Nearly 40% of the country's copper production was from Tuticorin Smelter. India was a net ...
... exporter of Copper Cathodes till FY18. The closure of Sterlite has caused the need for copper import in the country.

Rise in Copper Import:

The copper consumption within the country has risen by 1% so far in FY19 due to increased use of copper in construction, electrical and automobiles. According to the CARE report, India has imported nearly 82.6% of copper cathode and exported 72.7%. Nearly 86% of the copper cathode is imported from Japan and exported 83% to China. India has only 2% of copper ore reserves so any change can make a huge impact on supply. India has imported refined copper from Japan, Congo, Singapore, Chile, Tanzania, UAE and South Africa. And it has exported to China, Taiwan, Malaysia, South Korea and Bangladesh during FY19.

Drop in Copper Production:

According to a Research Report, the closure of Vedanta's Copper Smelter had dropped more than 46% of the country's production of base metal. This resulted in the import of refined copper worth of Rs. 14,000 crore last year. The Copper demand in India can be partially compensated by depending on the copper scrap within the country.

Who gets affected?

This rise in Copper Import affects the copper product manufacturers who depend on copper as a raw material for manufacturing their products especially copper wire makers and motor manufactures. The Chairman of Vidya Wires stated that the production cost for the copper products has increased by 1 percent which would amount to a lot in downstream manufacturing as more than 90 percent of the cost depends on the raw material.

Will this State Exist Longer?

The steady domestic demand for copper will not be met with the current production capacity. It is estimated that the refined copper demand will increase by 7 to 8 percent due to the growing demand from the power sector, renewable energy, hybrid and electric cars by the end of the current fiscal year. So India will continue to be a Net Importer of Copper until the court passes the judgment to restart the process in Tuticorin Smelter. These scenarios may also lift up many copper scrap importers in India. The organized system of collecting and recycling the copper scrap within the country can benefit the nation and reduce the dependency of scrap Import.

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