Copper production dips 47%, imports surge 233%

 The closure of Sterlite’s copper smelter in Tuticorin has resulted in a steep fall in refined copper production in the country during the first quarter (Q1) of 2018-19 (FY19). Production slumped 47.1% year-on-year (y-o-y) to 109-kilotonnes (KT) during the quarter. The sharp decrease in production has led to a domino effect — a strong increase in the country’s copper imports and a fall in exports.

Import of copper has surged 233% to 10 KT (one-kilo tonne equals 1000 tonnes) during the quarter. Incidentally, India used to be a net exporter of refined copper. Exports plunged 91.6% y-o-y to a mere 7 KT during Q1 of 2018-19. Interestingly, exports had increased by 70.1% in Q1 of 2017-18 when imports fell by 69.9%.

India imported refined copper from Japan (66% share), Congo (22%), Switzerland (5%), Tanzania (5%), South American countries (1%) and UAE (1%) and exported refined copper to China (58%), South Korea (30%), Bangladesh (6%) and Malaysia (6%) during Q1 of FY19.

Global copper prices have risen by 21.6% y-o-y during Q1 of FY19. LME (London Metal Exchange) prices of copper were volatile during the quarter due to trade tensions between China and the US. Prices of copper had risen during the first week of June when the verdict — of the permanent closure of Vedanta’s Sterlite smelter — was announced.

The share of India’s copper exports to China has decreased — from 63% during Q1 of FY18 to 58% in Q1 of FY19. The share of imports from Japan has increased from 33% to 66% during the timeframe.

Sterlite’s Tuticorin smelter, with a production capacity of 4 lakh tonnes per annum, accounted for nearly 40% of the country’s copper smelting capacity.

Production in Hindustan Copper (HCL) and Hindalco’s copper smelting arm, the other copper-producing units in the country, was also restrained in Q1 of FY19 due to the shutdown of their smelters for maintenance purposes. India’s refined copper production stood at 843 KT during FY18. The production is estimated to touch 510 KT in FY19.

Credit: The Economic Times