India’s Copper Import Dependency Expected to Decline Amid Domestic Capacity Expansion
India, historically a net exporter of copper, has seen a surge in imports following the closure of Sterlite's copper smelter in Tamil Nadu. However, this trend is anticipated to reverse with the introduction of new domestic production capacities.
The closure of Sterlite's 0.4 million tonnes per annum (MTPA) facility in May 2018 marked a significant shift in India's copper industry. Since then, copper imports have increased by 184% in H1FY24 compared to H1FY23, addressing a growing demand amidst a supply deficit. In contrast, India's copper production declined from 0.77 MT in FY18 to 0.55 MT in FY23.
The Adani Group's introduction of a 0.5 MTPA greenfield copper facility near Mudra Port, expected to commence operations in the first half of 2024, represents a pivotal development. Kutch Copper Ltd (KCL), part of the Adani group, has secured environmental clearance for this project. The company is also in the advanced stages of securing long-term copper concentrate supplies.
Copper plays a crucial role in various decarbonization technologies due to its superior electrical conductivity. It is essential in the infrastructure, construction, automobile, and consumer durable sectors. The global demand for copper is projected to more than double by 2050, driven by decarbonization efforts and the transition to renewable energy.
India's strategy for long-term low-carbon development includes significant investments in renewable energy and electric vehicles (EVs). The country aims for a non-fossil fuel energy capacity of 500 GW by 2030 and targets a 30% EV market share by the same year. The transition towards these goals will heavily rely on copper, with the metal playing a key role in EV batteries and renewable power generators.
Domestic demand for refined copper in India is expected to grow by approximately 11% in FY2024 and FY2025, outstripping global demand growth. This increase is driven by the government's focus on infrastructure development and a gradual shift towards renewable energy sources.
