2023 in review- Domestic copper demand rides on economic growth momentum amidst global headwinds.

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Hindalco Industries has seen its share price rise more than 20% during the period. Also Read- HFCL share price locked at over 7% upper circuit to hit 52-week high mark: What drove the rally? Nevertheless, on the Global front the demand growth has remained muted (around 2% in 2023 as per ICRA estimates). While the global copper demand was expected to get a boost by the opening up of China economy post easing of Covid-19 curbs at the start of 2023, the same however did not happen leading to disappointment.

In the meanwhile, rising interest rates led to global growth concerns and slowdown in the developed countries meant that copper demand did not see much uptick leading to prices also remaining rangebound. Copper prices on the London Metal Exchange have seen just 1.2% rise during the calendar Year 2023 till date. As the analysts remain watchful on the global demand, the copper prices are also likely to follow the same.

Nevertheless, the outlook for domestic growth remains strong. The Reserve Bank of India also has raised the GDP forecast to 7% for FY24 and given a robust growth projection for FY25. The Copper demand is likely to follow suit.

Domestic refined copper demand growth is expected to remain healthy at 11% in FY2024 and FY2025, outpacing the rate of global growth in copper demand, said rating agency ICRA. The infrastructure thrust of the Government of India is one of the key reasons for this growth since about 40% of copper demand is domestic demand is driven by construction and infrastructure sector . The automobile and consumer durable sectors that are growing well consume 11-13% each .