India’s Copper Demand Set for Double-Digit Growth in 2024, Outpacing Global Trends
India's copper demand is on track for robust growth in the financial year 2024, following a 16% increase in FY23. Mayur Karmarkar, Managing Director of the International Copper Association, India (ICA, India), predicts a continuation of double-digit growth, significantly outperforming the global growth forecast of approximately 3%. Key sectors such as infrastructure, electric vehicles (EVs), clean technology, and consumer durables are driving this demand surge. Copper, known for its broad industrial application, is often considered a gauge of global economic health.
In a recent discussion, Karmarkar shared insights into the trends shaping copper demand in India and worldwide, the transition from being a net exporter to an importer, and the potential impact of new smelters on the domestic scene.
Anticipated Trends in Copper Demand
Preliminary data up to November 2023 shows that copper cathode demand has reached 598,000 tonnes, which is 81.2% of the total demand from the previous financial year. This period also saw a significant increase in imports, with copper cathode imports surging by 174% year-on-year. Additionally, imports of copper scrap and wire rods have seen significant increases of 56% and 13%, respectively.
These trends indicate that India's copper demand may experience robust double-digit growth in 2024. Despite potential global economic challenges, the Indian government's commitment to infrastructure, clean energy transition, and consumer spending growth are expected to drive demand.
From Net Exporter to Importer: Changes in India's Copper Landscape
India's copper demand has seen remarkable growth, jumping from 13,100,000 tonnes in FY22 to 15,200,000 tonnes in FY2023. This growth reflects the nation's economic expansion, especially in gross fixed capital formation and private consumption. However, India's per capita copper usage remains low at 1 kg, compared to the global average of 3.2 kg. Industry estimates suggest a significant increase in usage, potentially reaching the global average by 2047.
The domestic production of copper, however, has struggled to meet the rising demand, leading to over 50% of India's smelting capacity shutting down. This shift has transformed India from a net exporter to an importer of copper, particularly following the closure of the Sterlite copper smelter in Tuticorin.
The launch of the Adani smelter, expected to begin production of 5 lakh tonnes in 2024, and the potential resolution of the Sterlite smelter's legal challenges could change the landscape. These developments may enable India to regain its status as a net copper exporter in the near future.
Exploring New Frontiers: Mine Availability and Acquisitions
The reinstatement of Vedanta's ownership of Konkola Copper Mines, with its substantial reserves, signifies a positive development. Other Indian companies are exploring opportunities to acquire exploration and mining rights overseas, although concrete deals are yet to be finalized.
In 2023, the Mines Ministry issued two composite licenses for copper blocks in Madhya Pradesh and Maharashtra, and announced the auction of the first tranche of 20 critical minerals, including a copper mine in Odisha. The bidding process is ongoing, highlighting efforts to enhance copper mine availability within India.
