- China playing key role in determining prices
- Fresh mines must be explored within country and overseas for raw material security
- Industry seeks common non-ferrous platform for addressing challenges
- EVs to drive copper demand growth in future
Morning Brief: Copper consumption in India will be close to 5 million tonnes by 2047, when India will complete 100 years of Independence, said Santosh Kumar, Chief Marketing Officer, Copper Business, Vedanta Limited, India. Kumar was speaking at SteelMint’s Engage 3.0 webinar series on ‘Outlook on the Indian Copper Industry: Opportunities and Challenges’.
“At present, our consumption is around 1 million tonne. So, a five-fold rise is on cards. In order to ensure such consumption level, we have to work on factors like pricing; raw material security and encouraging responsible recycling,” Kumar emphasised.
Kumar added that copper applications have grown over the last 25 years. The nation’s smelting capacity currently stands at a level where it is more than demand. “Today, our downstream industries have grown from 100 in 1996 to almost 1,000. Meanwhile, the finished goods industry has reached INR 129,000 crore from INR 30,000 crore in 1996. On the other hand, copper consumption has grown to the current $6.5 billion from $355 million in the period under review. In contrast, earlier till 1996, India was completely dependent upon imports. After Covid, India’s per capita copper consumption has remained same but applications have increased”, Kumar mentioned.
Comparison with China
Furthermore, Kumar stressed on the need for India to take a cue from China’s surge in the global copper market. Today, China plays the most important role in fixing the price of copper and its concentrates, he informed.
“We need to adopt a strategic approach like China. It has acquired 25 mines in other nations to secure its raw material supply. It may be noted here that in last 15 years, China’s population has grown 8% against India’s 20%. Interestingly, over 2005-20, India’s smelting capacity remained stagnant at 1 mnt whereas China’s grew from 2 mnt to 9 mnt. Per capita consumption of copper in China has grown from 3 kg to 9 kg, while India’s is stagnant at around 300 gm”.
Most importantly, in China, close to 50% of concentrates are available for exports and the rest are landlocked where logistic costs are not feasible. Significantly, in the last 15 years, China has dominated the space of raw material purchase. From 25%, its share in raw material purchase has increased to 70%. So, it is driving prices of copper and concentrates and has increased capacity from 16% to 46% against the current total 26 mnt total global smelting capacity.
Naturally, India, like China, needs to acquire copper mines or invest in mines overseas for raw material security. For instance, India’s imports were up by 300% from FY13 to FY22. Hence, India needs to focus on self sufficiency because dependence on imports in FY23 is 33%.
Sectors to drive demand
Copper will be a ‘vital material’ amid India’s clean energy push, he opined. “At a time when we are increasing our usage of electrical vehicles and gradually shifting towards renewable energy by installing more solar plants, copper consumption will also rise. Global temperature needs to be reduced by at least 2 degrees,” he said.
In the near term, key markets are wiring especially since post-Covid housing demand is up.
In addition, Railways also has a huge application area for copper.
Next is EVs. From nil in 2020 to almost 8 lakh EV units are expected to be sold by 2025 and by 2030, close to 2 billion units. As a result, the major focus will be on charging stations and batteries – where both will require copper in large quantity.
“In the next 5 years alone, due to EV, copper demand will increase by 200,000-300,000 tonnes per annum in India. Primary refined copper currently in use is 700,000 tonnes. Here 200,000 tonnes will be contributed by EVs easily,” Kumar shared.
Policies & challenges
Kumar said the metal lacks in terms of policy-making. The industry is seeking a single platform from where concerns and challenges of non-ferrous metals can be addressed.
Secondly, the current copper import duty is 5%. However, the export duty is nil but India is not exporting copper concentrates. Around 6% of India’s copper concentrates are coming for domestic use and the remaining is being imported. “Our biggest challenge is ensuring raw material security for our industry players. “We need to explore copper mines and copper concentrates lying in various locations within India and unleash our full potential,” he remarked. So far not too many mines were identified and hence not put for auctions but that is in process, he added.
Thirdly, “India needs to encourage responsible recycling and make copper a mainstream metal. In a significant move, companies are working with the government towards a copper scrap recycling policy. They are also looking at harnessing e-waste – old household phones and wires etc,” Kumar explained.
Leave a Reply