SMM, May 21 / PRNewswire-FirstCall-Asianet / Copper prices in India have soared recently as Vedanta Resources said on Friday that it had been forced to close a copper smelter in South India, one of India's largest copper smelters. Copper smelters in South India account for about 35 per cent of India's main copper market, mainly exported to the Gulf and Asian countries. The plant has been closed for more than 50 days and has an annual capacity of 400000 tons of copper products.
The rise in copper prices in India has been linked to the closure of capacity at copper smelters in southern India, as well as to India's growing consumption.
India's much-needed infrastructure has led to an increase in copper consumption:
India is a populous country, but its infrastructure is extremely backward, and the problems of electricity shortage and traffic congestion need to be solved urgently. According to WBMS data, India's current average annual consumption of refined copper is 450000 tons, and the per capita copper consumption is only 0.35kg/, which is lower than the world average 3.11kg/, and much lower than the per capita 8.25kg copper consumption in China. Low consumption level is bound to have a huge demand space. Market participants expect India's copper consumption to reach 1 million tonnes by 2020, with an average annual increase of about 100000 tonnes.
(data source: WBMS)
According to WBMS's latest report, India's refined copper demand for 2018 Q1 was 131600 tons, up 14.1 per cent from a year earlier. Quarterly production is also the second highest since the fourth quarter of 2010, after 135000 tons of Q3 in 2016. Demand for refined copper in India was strong in the first quarter of this year.
(data source: WBMS)
In addition, India accounted for 2.25 per cent of global refined copper demand in the first quarter of 2018, up from 2.09 per cent in the same period last year, with consumption at its highest level in nearly two years.
(data source: WBMS)
In terms of production, India produced 218800 tonnes of refined copper in the first quarter, down slightly from 221200 tonnes in the same period last year. On the premise of a 14.1 per cent increase in demand, the growth in production has not been one of the reasons why copper prices in India have performed brilliantly.
In a report last month, ICRA Ltd, a consultancy, said demand for copper in India was growing at an annual rate of 7 per cent or 8 per cent and that India could become a net importer of copper by 2020 if no new plants were put into production.
Modi talks about the Indian Dream: 1.5 billion Indians will be five trillion economies by 2025
Indian Prime Minister Modi spoke of "Indian climbing" in his opening speech at the 2018 Davos Forum. 'over the past few decades, too much regulation has affected the potential of young people in India, 'Mr. Modi said.' now we've bravely changed our policies, and the government has adopted a lot of policies to change that.' Now great changes are taking place in India. we have 1.5 billion Indians, and there is a song that reflects their hopes, and we want to introduce that dream to you. India will be a $5 trillion economy by 2025.
In summary, in addition to China, the United States, "Belt and Road Initiative", India's economic potential driven by the growth of copper consumption is expected to be a factor that can not be ignored in the market.
