In the last article, we saw an introduction to copper. In this article, we will focus on how the copper industry has developed in India over the last few years.
Copper industry: The Indian copper industry consists primarily of custom smelters only, a consequence of limited and poor quality copper ore deposits in the country. The aggregate copper ore deposits in India are around 350 m tonnes. The government owned company, Hindustan copper, owns around 280 m tonnes of deposits and was the only producer till 1995. Since then, the industry transformed significantly with the entry of private sector players, mainly Hindalco and Sterlite Industries. Infact, these two players accounted for nearly 86% of the total market share in 2007.
Capacity: The copper production capacity in India has registered a robust growth after the government allowed private sector companies in 1995. The capacity has grown 16 times from mere 62,000 tonnes in 1996 to 997,500 tonnes in 2007. The government owned Hindustan copper is a vertically integrated producer whereas Hindalco and Sterlite industries are mainly custom smelters.
Production: The copper production too has registered a strong growth in India in the last few years. It has increased from 420,000 tonnes in 2004 to 740,000 tonnes in 2007, registering a growth rate of 21% CAGR. As mentioned before, Hindalco and Sterlite industries account for more than 80% of the total copper production in India.
Consumption: The growth in copper consumption has come in at a lower rate as compared to production; it grew at a CAGR of around 10% between 2004 and 2007. The slower growth rate is attributed to the sharp decline in the demand for jelly filled telecom cables, the largest user industry of copper in India. However, the demand from power cables, winding, industrial applications and construction industry has increased between the same period. Moreover, deficit in the other Asian countries helped the domestic producers to increase exports.
The demand for copper is expected to remain strong in the coming years on account of government's emphasis on key copper consuming industries like power
, telecom, and infrastructure. Moreover, the growth in automobile and consumer durables industry would also further aid the increase in consumption of copper.
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