The Bombay Metal Exchange (BME) said that India's quality control order on copper cathode could lead to a reduction in domestic supply by imposing a "costly and unnecessary compliance burden" on foreign suppliers.
As the world's second-largest importer of copper cathode, India implemented quality control measures on copper cathode imports in December last year, requiring all suppliers, including domestic and overseas ones, to ensure inspection of substandard products for the domestic market.
The BME said that the quality control measures had led to a decline in imports, a claim denied by the government.
"The downstream industry is facing a real and imminent shortage as domestic licensed suppliers are unable or unwilling to supply the market, and foreign substitutes are unreliable," the BME said.
To comply with the quality control regulations, suppliers must obtain licenses from the Bureau of Indian Standards, which oversees quality control in India.
The BME said that all five domestic licensed companies consume their entire copper cathode supply for their own use.
"As for foreign license holders, four out of ten do not supply copper cathode at all, but only provide ingots or semi-finished products," the BME said.
The Indian government said last month that among the ten foreign suppliers certified under the new regulations, seven are from Japan, two from Malaysia, and one from Austria.
Japan accounts for about two-thirds of India's copper cathode imports, followed by Tanzania and Mozambique.
The BME said that there are increasing signs that Japanese license holders will exit the Indian market due to a costly and unnecessary compliance burden.
Japanese trading company Marubeni said: "There are currently no issues related to supplying India."
Copper is one of the 30 critical minerals identified by India in 2023, and domestic demand is expected to double by 2030. Major domestic suppliers in India include Hindalco Industries and state-owned Hindustan Copper.
(Wenhua Comprehensive)
