Use of Copper in India Set to Go Up

MUMBAI (CommodityOnline.com) -- India's growth in the power sector has resulted in an increase in copper consumption. According to International Copper Promotion Council (ICPC) officials, demand for copper in India is expected to continue to grow in double digit.

Considering the growth in India, the copper use in India is bound to go up again.

India has installed capacity to manufacture about 10 lakh tonne copper a year. The domestic demand is estimated at about 5 lakh tonne a year while the rest is being re-exported.

India is largely dependent on import of raw material to manufacture copper. Hindalco owns the country's largest copper smelting and refining plant at Dahej, Gujarat, with two copper mines in Australia.

India, Russia, China are some of the leading consumers of copper now with tremendous growth in construction and power. However, China is the single largest consumer with about 25% of the total global demand of 80.5 million tonne.

A study from the International Copper Study Group (ICSG) says strong growth in apparent refined copper usage in China is expected along with continued growth in India and Russia, while usage is expected to decrease in the EU, Japan, and the United States.

According to ICSG data, the copper market had a production surplus of 230,000 tonnes. Projections for 2007 indicate a small surplus of around 110,000 tonnes (0.6% of usage), and projections for 2008 indicate a larger surplus of around 250,000 tonnes (1.3% of usage).

It said world copper mine production in 2007 is projected to rise by 5.1% to 15.79 million tonnes, an increase of about 770,000 tonnes compared with that in 2006. Production in 2006 was essentially unchanged from that in 2005 owing to production problems in Chile, Indonesia, and Mexico.

Mine Production in 2008 is expected to increase by 1.2 million tonnes (+7.6%) to 17.0 million tonnes, owing to new mine developments and increased capacity utilization. For both years, higher growth rates are expected for SX-EW production than for concentrate production.

World production of refined copper (adjusted for both feed shortages and production disruptions) is projected to reach 18.12 million tonnes in 2007, an increase of about 765,000 tonnes (+4.4%) compared with that of 2006. Refined production in 2008 is projected to increase by 4.6% to 18.95 million tonnes, an increase of about 830,000 tonnes compared with that of 2007.

Electrolytic refinery production increases in China, India and Japan, and SX-EW production growth in Chile, Africa and the United States are expected to account for most of the growth. Concentrates production in 2008 is expected to restrain the growth of refined production, with surplus inventories of copper concentrates having been largely depleted during 2006/2007.

World refined copper usage increased by only 2.3 % in 2006 to 17.12 million tonnes, constrained by a decline in U.S. and Chinese usage of around 6% and 1%, respectively.

The main contributors to 2006 growth were the European Union (EU), Japan, India and the Russian Federation. In 2007, refined copper usage is projected at 18.0 million tonnes, an increase of about 890,000 t (5.2%) compared with that of 2006.

Strong growth in apparent refined usage in China is expected along with continued growth in India and Russia, while usage is expected to decrease in the EU, Japan, and the United States. World copper use in 2008 is projected to grow by 3.8%, or about 690,000 t, to 18.70 million tonnes.

For 2009, the expected growth in production is expected surpass the growth in usage and a larger market surplus is anticipated.

By arrangement with www.commodityonline.com.

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