India: Aluminium production shows positive momentum while copper output down in May'23

In May 2023, India's production of aluminium, copper, zinc, and lead showed m-o-m gains. Aluminium increased 4% likewise copper ores/concentrates went up by 6% m-o-m. Although, copper cathode production fell by 14% which make the overall copper production gain 4% m-o-m. Lead production witnessed a 6% rise. On the other hand, zinc production remained stable during the same period.

During May 2023, significant base metal producers escalated production in response to increasing demands, particularly through the expansion of mining operations. Concurrently, India experienced a robust industrial growth rate of 5.2%, driven by stellar performances in the manufacturing and mining sectors.

Aluminium

In May 2023, India's aluminium production reached 351,000 tonnes (t), showing a 4% increase from April's 339,000 t. In comparison, production was recorded at 346,000 t in May 2022.

India's total installed capacity for aluminium smelting stands at approximately 4.1 million tonnes (mnt). Among the major players, Vedanta Ltd. produced 149,000 t in May 2023, followed by Hindalco at 113,000 t, Balco at 49,000 t, and Nalco at 40,000 t.

Despite the country's efforts to ramp up production, the demand for aluminium alloys and other aluminium products have increased due to capacity expansion by major players in the domestic market. Consequently, there has been a rise in imports of scrap (raw material) to meet the growing demand. This also signifies the production in the upcoming months might be on the higher side.

Copper

In May 2023, copper production in ores/concentrates and semi-finished products reached 342,000 t, showing a 4% m-o-m increase from April's 330,000 t. Remarkably, production surged 101% y-o-y compared to 170,000 t in the corresponding period last year (CPLY).

Out of the total copper production of 342,000 t, ores/concentrates accounted for 311,000 t (up 6% m-o-m), produced by Hindustan Copper Limited (HCL), while the remaining 31,000 t represented the volume of semi-finished products which was down m-o-m by 14% from 36,000 t in April 2023.

HCL emerged as the leading producer with a total copper (ores/concentrates) output of 311,000 t in May 2023. Hindalco and Sesa Sterlite (Vedanta) followed with respective outputs of 18,000 t and 13,000 t of copper cathode. India's installed copper capacity stands at 1.08 mnt per year.

The increased production of copper ores is attributed to the growth and development in various sectors, including infrastructure, real estate, telecom, electrical industry, renewable energy, and electrical vehicle. These industries' expansion has driven the demand for copper. Notably, there was an increase of 6.1% in the industrial output of the electricity sector in May 2023.

Despite the increase in copper ore production in India in May 2023, it has not yet reached the levels achieved before the permanent closure of Vedanta's Sterlite copper smelter in Tamil Nadu in May 2018.

Zinc

In May 2023, zinc production remained stable at 70,000 tonnes (t) compared to the previous month. However, y-o-y, there was a slight decline of 1% from the CPLY when the production stood at 71,000 t.

India's total installed zinc smelting capacity is approximately 912,000 tonnes (t). Hindustan Zinc Limited (HZL) holds the distinction of being India's sole refined zinc producer, with an output of approximately 70,000 t in May.

Lead

In May, India's lead production reached 18,000 t, marking a 6% m-o-m increase from April's 17,000 t. However, y-o-y, lead production remained stable, showing no change from the CPLY.

India's installed capacity for lead production is 204,000 tonnes (t) per year. HZL is the sole producer of refined lead in the country, with an output of 18,000 t in May.