India's base metal production sees modest growth in May'24 barring copper

In May 2024, India's base metal production displayed positive trends. Aluminium production inched up by 3%, followed by zinc with 4% increase, and lead production increased by 6%. Meanwhile, copper cathode production was down by 27%.

Despite the marginal growth in base metal production India's industrial output grew 5.9% y-o-y in May, exceeding the 4.9% forecast by economists. This uptick, driven by robust mining and electricity sectors, marked an increase from April's 5% growth. Electricity generation surged by 13.7%, while manufacturing rose by 4.6%.

Aluminium

In May 2024, India's aluminium production amounted to 3,53,997 tonnes (t), marking a 3% increase compared to 3,42,163 t in the previous month. On a y-o-y basis, aluminium production witnessed a slight rise of 1% in May 2024 compared against the corresponding period last year (CPLY).

India's primary aluminium smelting capacity totalled approximately 4.1 million tonnes (mnt). The steady production can be attributed to a consistent demand in the Indian market.

This sector is primarily dominated by key players including Vedanta, Hindalco, Balco, and Nalco. Among these major players, Vedanta, a significant contributor, witnessed a 3% increase in aluminium production, with their output totalling 1,53,811 t.

Meanwhile, Hindalco's production remained varied at 1,12,000 t, and Balco experienced a 3% increase, resulting in a production level of 49,632 t. Nalco, however, faced a rise in aluminium production, with a notable 6% increase, producing 38,554 t during the same period.

Copper

Copper cathode production in May 2024 saw a 27% m-o-m decrease, reaching 32,000 t compared to the previous month's 44,000 t. Similarly, when examining the y-o-y data, copper cathode production increased by 3% in May 2024 compared to 31,000 t in the same period of the previous year (CPLY). Hindalco emerged as the major contributor, with a production of 27,000 t, followed by Sesa Sterlite (Vedanta) with 5,000 t of copper cathode.

Conversely, India saw an increase in copper ore and concentrates production, with a 2% m-o-m rise, totalling 330,356 t in May 2024 compared to 322,649 t in April 2024. Hindustan Copper Limited (HCL), as the sole primary producer, accounted for the entire production of 330,356 t of copper ores and concentrates in May 2024.

Adani Group has entered India's metals sector with its first copper facility in Mundra, Gujarat. The new unit, named Kutch Copper, aims to address domestic copper production gaps left by the closure of Vedanta's Sterlite unit. With an initial capacity of 0.5 mnt per annum, Adani plans to scale up to 1 mnt, potentially becoming the world's largest single-location custom smelter. The move supports India's goal of increased self-reliance in copper production.

Zinc

In May 2024, zinc production rose by 4% m-o-m to 74,000 t against 61,000 t in April 2024. Similarly, zinc production witnessed a gain of 6% y-o-y from 70,000 t in May 2023. India's primary zinc smelting capacity stands at about 912,000 t. HZL is India's sole refined zinc producer, contributing around 74,000 t in May 2024.

Lead

India's lead production increased in May 2024 to 17,000 t. Notably, lead production decreased by 6% y-o-y in May 2024 from 18,000 t in the CPLY.

India's installed capacity for lead primary production is 204,000 t/year. HZL is the sole producer of refined lead with an output of 17,000 t in May 2024.