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India's Copper Import Rises 26% In Q1; Momentum Expected To Continue Further: Report
India became net importer of copper for the first time. With rising demand from various sectors, the import figure is expected to increase every year even as domestic production is hardly witnessing any uptick.
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India's copper import which increased 26% to 60,766 tonne in June quarter of 2021-22 is expected to rise further in the remaining part of the financial year with economic activity witnessing a strong recovery from COVID-related restrictions, International Copper Association said.
Country's copper imports may touch 3 lakh tonne as economic growth picks up momentum despite adequate domestic capacity to meet the rising demand, it said.
"In the first quarter of FY22, India’s copper imports shot up by 26% to 60,766 tonnes from 48,105 tonnes in the same period last year even as the nation was in the grip of second COVID wave with multiple lockdowns.
"The demand for the crucial metal, which is a key input for multiple sectors, is expected to see a further rise in the remaining part of the financial year with economic activity witnessing a strong recovery from COVID related restrictions," it said.
India ended the last financial year with copper imports of 2,33,671 tonnes.
With 26-30% growth, imports are likely to be in the range of 295,000-304,000 tonnes for the current financial year, the association added.
"It is disheartening to see imports rising so steeply and other nations gaining at our expense even though we have adequate domestic production capacity to meet our domestic demand," International Copper Association Director Mayur Karmakar said.
"We are witnessing a strong increase in imports of copper into the country. Even though the first quarter of this financial year had multiple lockdowns and various restrictions imposed across several states due to the second COVID wave, copper imports grew by a robust 26% as compared to the same quarter last year," Mr. Karmakar said.
He said given the strong demand emanating from various sectors, copper imports may increase by 30% year-on-year between July and March.
"With the economy opening up and lockdown restrictions being eased in most parts of the country, we see a further spurt in demand as manufacturing and other sectors gain momentum," he added.
Significantly, India was a net exporter of copper for close to two decades before the closure of Sterlite Copper plant at Tuticorin, Tamil Nadu in May 2018.
In the same year, India became net importer of copper for the first time. With rising demand from various sectors, the import figure is expected to increase every year even as domestic production is hardly witnessing any uptick.
According to Ministry of Commerce, India earned a net foreign exchange of $1.1 billion on account of export of copper in 2017-18. However, after the shutdown of Sterlite Copper’s smelter plant, India now incurs a net foreign exchange outflow of $1.2 billion due to imports of copper every year.
Further, India’s import of refined copper has benefitted China to a great extent. Prior to the shutdown of the Tuticorin smelter, India exported copper worth USD 2.1 billion to China in 2017. The same sharply reduced to only $532 million by 2020. During the same time, exports of copper to China from Pakistan and Malaysia increased by over $2 billion from 2017 to 2020.
In other words, the suspension of operations at the Tuticorin smelter has helped China reduce its import dependence on India by $1.5 billion.