India’s refined copper production during FY18 was 843 KT. India has been a net exporter of refined copper (A ’grade quality) as there has been excess production in the domestic markets.
The Tuticorin smelter accounts for 40% of the Country’s copper smelting capacity, and has contributed to 48% of the refined copper production during FY18. Given that refined copper consumption is to increase in the given backdrop of robust infrastructure activities undertaken by the Government, closure of smelter will impact the trade dynamics, of India leading us to resort to additional imports changing the Country from a net exporter to a net importer.
India exported 344 KT and imported 37 KT of refined copper during FY18 (April-February). Even if the two existing producers (Hindalco and HCL) increase their utilisation rate it will not be sufficient to meet the domestic demand. The industry’s current utilisation level is well over 80% and even if they raise their utilisation levels to 100% they cannot meet the shortfall. Hindalco will not be able to divert its production to the domestic market due to its long-term export contracts.