Market to almost double by FY26: ICAI
India’s demand for copper is set to rise spurred among other factors by the government’s policies — favouring electric vehicles (EVs) to displace fossil fuel-driven vehicles by 2030; and enabling the provision of round-the-clock power to all, an industry body said.
The current demand for copper in India, estimated at 970 kilotonnes (kt or thousand tonnes), is expected to reach 1,812 kt by FY26, International Copper Association India (ICAI) said. The electrical sector accounts for 56% of total demand.
Currently, only 50% of the copper demand is met through supply from domestic refined copper producers while 30% is met through imports. The rest comes from recycled copper. Based on the planned capacity additions, total capacity for refined copper in India is expected to increase from 1,000 kt to 1,400 kt against a total copper demand of 1,812 kt.
“Out of the total copper demand, 40% is expected to be met through supply from domestic refined copper producers with the rest expected to be met through imports. There exists a potential gap of 230 kt,” ICAI said. “The persistent push from the government on increasing the share of renewable energy in the electricity mix and their intent to have a majority of vehicles on road as EVs by 2030 will create demand,” Sanjeev Ranjan, MD, ICAI said.
‘Boon for industry’
He said the Power ministry’s drive towards ‘electricity for all 24×7’ and the urban development ministry’s move to develop smart cities, along with policies for housing are proving to be “a boon for the copper industry in India.”
These factors will help raise demand for copper for building wires, power cables and winding wires for high efficiency motors and transformers; in the renewed thrust for and usage in high-efficiency products including appliances and air conditioners; for use in e-vehicles for their powertrains as well as for charging infrastructure, he said.
The industry also faces many challenges. “Government needs to reconsider Free Trade Agreements that have lowered barriers for export and raised custom duty for downstream products so that it does not hurt domestic industry. Another challenge is the high capital cost. Interest rates in India are very high [8-9%] as compared to European countries [1%],” Mr. Ranjan said.
He said the high volatility in price of copper was also a big challenge. “Higher level of volatility has direct impact on business margins of the industry.” he added.