ICAI reports 16% growth in copper demand for FY'23

The International Copper Association India (ICAI) has reported a significant 16% increase in copper demand for FY 2023. In FY2023, there has been a substantial increase in copper demand in India, surging to 1,522,000 t, as compared to the 1,311,000 t recorded in FY2022.

Copper demand in India has displayed remarkable double-digit growth for consecutive years, following a contraction in FY21 caused by the disruptions brought about by the Covid-19 pandemic. This sustained growth trend suggests a significant and durable opportunity for new investments in the Indian copper industry.

The consistent expansion in copper demand reflects the resilience of the market and the potential for long-term growth, which can be a favourable prospect for businesses looking to invest and participate in the thriving Indian copper sector.

The growth in the Indian copper industry is firmly grounded in a solid foundation that encompasses policy reforms, substantial public and private investments, and increased consumer spending across a wide range of sectors. These sectors include building construction, renewable energy, electric mobility, industrial applications, railways and metro development, power transmission and distribution, and the production of white goods. This collective momentum within these segments underpins the industry's notable expansion.

The transportation sector, encompassing automobiles, railways, and metro systems, stands as a key catalyst for this expansion, marking a substantial 34% surge in copper demand. This remarkable uptick can be attributed to the ongoing electrification and modernisation of railway networks, the expansion of rapid transportation systems, and a notable 21% increase in automobile sales, including the growing adoption of electric vehicles (EVs).

In the construction sector, a significant 11% increase in copper demand is due to the greater use of copper per square foot, particularly in premium and middle-income housing. This growth is a result of the rising preference for copper in electrical and plumbing systems, driven by its superior electrical conductivity and durability, especially in modern and high-end housing projects.

The pent-up demand that accrued during FY21 and FY22, primarily stemming from the disruptions caused by the Covid-19 pandemic, has translated into significant growth of 13% in FY23 within the consumer durables sector. This growth is notably observed in products like Room Air Conditioners (RACs) and electronic devices such as laptops, PCs, and mobile phones.

The implementation of the Production-Linked Incentive (PLI) scheme has spurred capital expenditure (capex) expansion in various industrial sectors, resulting in the announcement of INR 1.7 lakh crore in investments. This surge in investments has consequently contributed to the heightened demand for copper, as per latest reports.