In spite of a slowing global economy and moderating demand expansion elsewhere, including top consumer China, India is predicted to have one of the fastest growing copper markets in the world 2022.
Despite the global downturn, India's economy is humming across manufacturing to infrastructure and property sectors, as pent-up demand post the COVID-19 pandemic, rising income and a series of government policies have boosted consumption.
Refined copper consumption in India during January-August this year jumped 45% from 2021 to 435,466 tonnes, outpacing 4% growth globally and a 5% uptick in China in the same period, World Bureau of Metal Statistics data showed.
"Copper demand is back to pre-COVID levels," told Satish Pai, managing director at metal maker Hindalco Industries.
"We see a robust domestic growth trajectory driven by revival in housing demand, automation and shift towards e-mobility (including railway
electrification and metros) and a strong pipeline of renewable energy and infrastructure projects."
While its copper usage is dwarfed by China's, which made up for 55% of the world's demand for the red metal last year, India's surge may result in consumption reaching a record this year, illustrating the strength of the country's economic rebound after COVID.
Copper's main consumers include the property sector, home appliance makers and green energy transition industries such as electric vehicles, solar and wind power plants.
Strong copper demand in India was underpinned by growing domestic end-use market amid urbanisation and industrialisation and government's stimulus measures, said Wood Mackenzie analyst Bhavya Laul.
"(The government's) production-linked incentive scheme for white goods which also incentivises air conditioner copper tube production is attracting investments," she said.
Growing capacity and utilisation rates at wire rod plants, including Hindalco's Ryker plant and a new factory developed by Kutch Copper, a subsidiary of Adani Enterprises Ltd, will also boost consumption, Laul added.
Wood Mackenzie forecast India's refined copper consumption in 2022 to expand by over 15% from a year earlier to around 620,000 tonnes, and the annual growth rate is seen averaging at more than 12% during 2022-2027.
That is compared to a projected 0.7% increase in global refined copper consumption this year, and an average annual global growth of 2.5% during 2022-2027, Laul said.