March 4, 2021

copper costs: Copper costs contact highest stage in 16 months, says ICRA



Pune: Copper costs have risen 40% in 4 months to the best in 16 months because the pandemic disrupted the provide chain, ranking company ICRA mentioned.

“The mining restrictions as a result of pandemic is estimated to have resulted in a pointy drop within the manufacturing of copper ore throughout Q2 CY2020. That is progressively leading to a scarcity of the completed steel out there and the prevailing state of affairs might proceed within the close to time period, which is fueling steel costs upwards,” it mentioned.

Costs have risen from a three-year low in March 2020, mentioned Jayanta Roy, Senior Vice President and Group Head, ICRA. “Whereas the macro-economic uncertainties as a result of pandemic have impacted international copper demand, leading to a contraction in consumption by ~2.5% in Q1 CY2020, the supply-side impression of the pandemic however has resulted in a V-shaped restoration in costs,” he mentioned.

Virtually half of the world’s copper ore is mined in South America, primarily in Chile and Peru, the place mining output has fallen nearly 50% due to the pandemic, ICRA mentioned. The disruption has resulted in decrease major steel manufacturing from the start of June 2020, it mentioned.

In India, Hindustan Copper Ltd (HCL) is the one copper miner and Hindalco Industries Ltd (Hindalco) is at the moment the one working copper smelter-cum-refiner within the nation. “Underneath the prevalent state of affairs, HCL is prone to profit from the buoyant worth ranges. The general profit nevertheless can be constrained by restricted operations as a result of pandemic. However, Hindalco’s margin from copper operations can be impacted by the correction in TC/RC,” mentioned ICRA.