India’s copper demand witnessed a 16 per cent growth in FY23. And in FY24 the trends indicate a possible “double-digit growth” too, outstripping global growth, the latter pegged at around 3 per cent, said Mayur Karmarkar, Managing Director, International Copper Association, India (ICA, India). Sectors like infrastructure, EVs and clean tech are among the key sectors driving consumption in India, apart from consumer durables. Because of its wide industrial use, copper price is often viewed as a barometer of global economic health.

In an interview with businessline, Karmarkar talks about India’s copper demand trends, the country’s journey from being a net exporter to an importer and how new smelters coming-up can change the scenario here. Excerpts:

Q

How is copper demand expected to play out in 2024 - both in India and globally?

Early ​data paints a promising picture for continued double-digit copper demand growth in FY24.

During the first few months (ending November 2023), copper cathode demand reached 598,000 tonnes or 81.2 per cent of the total demand from the previous financial year. Cathode imports surged by 174 per cent y-o-y during this period. Imports of copper scrap and wire rods witnessed significant increases of 56 per cent and 13 per cent, respectively.

These trends collectively suggest that India’s copper demand is likely to witness robust double-digit growth in 2024. While global economic headwinds pose some risks, the Indian government’s focus on infrastructure development, clean energy transition and growth in consumer spending are expected to remain key growth drivers. The global demand growth for copper is expected to be in the range of 3 per cent.

Q

India continues to be a major importer. Any change in patterns that you see? 

Copper demand in the country has witnessed significant growth, jumping from 13.1 lakh tonnes in FY22 to 15.2 lakh tonnes in FY2023. This surge mirrors the country’s economic expansion, particularly in gross fixed capital formation and private consumption. However, per capita copper usage in India remains low at 1 kg compared to the global average of 3.2 kg. Industry estimates suggest there will be substantial growth in usage, potentially reaching the global average by 2047.

However, domestic copper production struggled to keep pace with this rising demand. Over 50 per cent of India’s smelting capacity has shut down, leading to a transition from being a net exporter until May 2018 to a reliance on imports in recent years. The closure of the Sterlite copper smelter in Tuticorin significantly impacted this shift.

The upcoming Adani smelter, expected to begin production of 5 lakh tonnes in 2024 and a potential resolution of the Sterlite smelter’s legal issues, also in 2024, could alter the scenario. These developments, if successful, could pave the way for India to potentially reclaim its position as a net copper exporter soon.

Q

Availability of mines remain an issue. Are there Indian companies looking at acquisitions?

Vedanta reinstated its ownership and management of Konkola Copper Mines ending a row over ownership of the assets with the Zambian government that started in 2019. The mine assets have reserves and resources of 16 million tonnes of contained copper with a copper grade of 2.3 per cent as compared to the global average of 0.4 per cent. Other Indian companies are looking to acquire exploration and mining rights overseas but nothing concrete has materialized as yet.

Q

Any mine (copper) availability in India? 

The Mines Ministry issued two composite licenses in 2023, one in Madhya Pradesh (Shitalpani Copper Block) and one in Maharashtra (Minzhari Copper Block). The Ministry has announced auction of first tranche of 20 critical minerals in Nov 2023 which includes one copper mine, located in Odisha (Dudhiasol East Nickel and Copper Block). The bidding process is still on-going.