India's copper import rises 26% in Q1; momentum expected to continue further: Report

The June quarter of 2021-22 saw a 26% increase to 60,766 tonne from the India's copper import, and the rest of the financial year is projected to see a significant recovery from COVID-related limitations, according to the International Copper Association.

According to the report, the country's copper imports might reach 3 lakh tonne as economic growth accelerates, despite enough domestic production to satisfy increasing demand.

"India's copper imports increased by 26% in the first quarter of FY22, to 60,766 tonne from 48,105 tonne during the same time last year, despite the country being engulfed in the second COVID wave, which resulted in several lockdowns."

"With economic activity experiencing a robust rebound from COVID related limitations, demand for the essential metal, which is a vital ingredient for various industries, is projected to experience a further climb in the remaining half of the financial year," it added.

India imported 2,33,671 tonne of copper in the previous fiscal year.

Imports are expected to be in the range of 295,000 -304,000 tonnes for the current financial year, according to the organisation, with a growth rate of 26-30%.

"It's depressing to watch imports soar and other countries benefit at our expense, despite the fact that we have enough domestic production capability to fulfil our local demand," said Mr. Mayur Karmakar, director of the International Copper Association.

"Imports of copper into the nation have increased dramatically. Even though the second COVID wave resulted in several lockdowns and limitations across several states in the first quarter of current fiscal year, copper imports increased by 26% compared to the same period last year" Mr. Karmakar remarked.

Copper imports may climb by 30% year on year between July and March, he added, owing to high demand from diverse industries.

"We predict a further spike in demand as manufacturing and other sectors gain pace as the economy opens up and lockdown restrictions are removed in most regions of the nation," he added.

Prior to the closure of the Sterlite Copper facility in Tuticorin, Tamil Nadu in May 2018, India had been a net exporter of copper for over two decades.

India became a net importer of copper for the first time in the same year. With increased demand from diverse industries, imports are anticipated to rise year after year, while local output hardly increasing.

According to the Ministry of Commerce, India earned US$ 1.1 billion in net foreign exchange from copper exports in 2017-18. However, with the closure of Sterlite Copper's smelting facility, India now faces an annual net foreign exchange outflow of US$ 1.2 billion due to copper imports.

Furthermore, India's refined copper imports have benefited China significantly. In 2017, India exported copper worth US$ 2.1 billion to China prior to the closure of the Tuticorin plant. By 2020, the same had plummeted to only US$ 532 million. Copper shipments from Pakistan and Malaysia to China rose by more than US$ 2 billion between 2017 and 2020.

In other words, the halting of operations at the Tuticorin smelter has helped China decrease its US$ 1.5 billion reliance on India for imports.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.