India's semi-finished copper imports surge 46% in H1

• Lower domestic cathode production triggers rise in imports
  
  
• Scarce availability leads to drop in scrap imports
  
  
• Finished copper imports rise 10% y-o-y in H1
  
  

Morning Brief: India experienced a notable surge in semi-finished copper imports during January-June 2023 (H12023), with a 46% increase compared to H12022, reveals data maintained with SteelMint. However, copper scrap imports remained lower by 10%, during the same period.

Total copper product imports into the country witnessed a growth of 19% to 503,897 tonnes (t) during H1 compared to 425,404 t in the corresponding period last year (CPLY).

Major factors resulting in higher imports:

Lower domestic cathode production levels, declined imported scrap volumes along with an inappropriate manufacturing index were the key parameters driving the overall increase in import volumes.

Domestic cathode production was down around 8% in H1 y-o-y to around 241,000 t against 262,000 t in H12022.

Getting right kind of scrap is a challenge and led to lower cathode production in India.

Average copper stocks on the London Metal Exchange (LME) experienced a significant decline, falling from 107,764 t in H1 2022 to 74,919 t in H12023, marking a decrease of 32,845 t. This reduction in copper inventories can be attributed to increased global demand for the metal, which outpaced supply, leading to a decrease in available stocks. As a result, the demand for copper imports surged to meet the growing needs.

India's PMI in H1

The Purchase manager Index (PMI) for India has been consistently above 50 for the past 6 months, indicating that the manufacturing sector is expanding. However, the index has been declining since March 2023, suggesting that the pace of expansion is slowing. The forecast for August 2023 is 55.0, which would be the lowest reading in 6 months. Better PMI indicated good demand of copper in the industry.

Commodity-wise imports

Semi-finished products

India's semi-finished copper imports saw a robust 46% increase in H12023, touching 252,530 t compared to 173,335 t in CPLY. Notably, cathode imports, accounting for approximately 29% of total imports, saw a remarkable surge of 255% to 146,596 t from 41,334 t in CPLY, pulling up the overall volumes.

Conversely, imports of anodes and billets experienced a decline during H12023, with the former falling by 20% to 105,200 t and billets, by 13% to 735 t.

Additionally, copper cathode imports witnessed a significant 21% m-o-m rise, reaching 31,443 t in June 2023, up from 26,018 t in May.

Scrap

In H12023, imports of copper scrap were recorded at 119,124 t, a 9.6% drop compared to 131,769 t in the same period last year. Of this, the highest share was of brass honey scrap at 43,305 t followed by druid scrap at 30,571 t, and birch at 14,096 t. Additionally, smaller volumes of berry, clove, and motor scrap were traded, although these quantities were negligible.

Finished products

Finished copper products imports- including both longs and flats- recorded a gain of 10% to 132,243 t during H12023 compared to 120,300 t in H12022.

In H12023, finished long copper imports into India witnessed a slight 1% increase, totaling 57,462 t. This rise was mainly driven by a modest 9% increase in bars, rods, and profiles imports, cumulatively amounting to 7,009 t. Furthermore, wire rod imports almost remained stable at 50,453 t, unchanged from 50,512 t in H12022.

In H12023, finished flat copper imports into India reached 74,782 t, representing an 18% increase. Among these, pipes and tubes accounted for 56,152 t (a 21% rise), foils amounted to 9,433 t (a 14% increase), and imports of plates, sheets, and strips saw a 7% growth to 9,196 t.

Country-wise imports

In H12023, India's copper imports mainly came from Japan, Zambia, Vietnam, Thailand, and Congo. Japan which enjoys an FTA with India, exported 112,480 t, focusing on semi-finished and finished products. Zambia exported 97,437 t, primarily anodes. Vietnam's exports were at 39,353 t, mainly copper tubes and pipes. Thailand accounted for 27,441 t, majorly exporting finished long products, and Congo exported 26,923 t, primarily refined copper (copper cathodes).

Outlook

In H2-2023, India foresees robust growth driven by housing demand, automation, e-mobility, and infrastructure projects. Increased copper use, tied to construction, could boost semi-finished imports.