The Hindu Business Line : Copper producers upbeat on rising demand, prices

Mumbai June 14 Copper producers are a cheerful lot today because of rapidly rising demand and firming prices. Worries over substitution of the metal are played down, although concerns over shortage of copper concentrate remain.

This is the sense one gathered at the India Copper Forum 2007 held here today under the aegis of International Copper Promotion Council (India).

At 22 million tonnes, global copper demand in 2006 was 3 per cent higher than the pervious year. The industry expects to see similar demand growth to continue in 2007 too.

"There is no reason why this growth rate cannot be sustained," asserted Mr Peter Charlton, Chairman of International Copper Promotion Council (India).

Demand

Indian copper fraternity is optimistic about domestic demand. Many believe it would double by 2011-12 (terminal year of XI Five Year Plan) from the current level of approximately 500,000 tonnes. "Domestic demand is projected to reach the 1 million tonne mark by 2012," Mr Kishore Kumar, Chief Executive of Sterlite Industries Ltd, said.

But there are no production estimates for the coming 4-5 years. Supply is not keeping pace with the increasing demand, Mr Kumar pointed out. Huge demand is expected to churn out from the infrastructure and power transmission & distribution projects.

Substitution

In the domestic market, segments that showed demand growth last year included rotating machinery (23.5 per cent), cables (35.6 per cent), transformers (24 per cent) and electrical wires etc (21.5 per cent).

With such aggressive growth, and prospects of further demand expansion looking real, India can potentially turn into a net importer of copper like China.

Currently, India produces almost 1 million tonnes of copper of which 50 per cent is consumed domestically while the rest is exported.

Substitution, albeit on a small scale, is beginning to impact this base metal. Last year, 300,000 tonnes of the global copper demand was met by plastic in non-electrical applications. This occurred mainly in the European Union.

However, in India this kind of substitution is not expected, as there is not much non-electric usage of the metal in the country, said an official of a producing company.