Withdrawal of Copper Export Incentive Puts Copper Producers in Jittery

The withdrawal, effective from April 1, 2015, has made the country’s copper exports globally uncompetitive, they say.

March 28, 2015

In a move to meet the global competency, key copper producers have joined together seeking incentivisation of duty on exports of refined copper. A public sector company Hindustan Copper and Hindalco Industries-a private sector copper producer, along with an MNC giant-Sesa Sterlite, have joined hands seeking restoration of 2% duty incentive on refined copper exports that was removed earlier this year, said the reports.

Indian Primary Copper Producers Association is said to have reportedly submitted the representation to the Ministry of Commerce seeking the duty incentive on the refined copper exports, the reports added.

According to the association, withdrawal of the duty incentive on copper exports, that has been effective from April 1, 2015, has made the country’s copper exports uncompetitive in the international markets.

While according to the Director General of Foreign Trade (DGFT)’s data the copper exports from the country till end of December 2014 stood at USD 540 million, the association’s estimates say that the total worth of exports of refined copper by the primary producers alone during the whole Financial Year 2014-15, stands at USD 660 million.

The copper refiners, affected by low domestic demand, have been using 80 percent of the installed capacity 9.5 lakh tonnes, say the reports. The Indian producers have been rapidly losing their share in the domestic market, as the imports in the last three years have grown from 85,000 tonnes to 1.66 lakh per tonne, the spokesperson was quoted to have said, according to the reports.

On the weak domestic demand, a spokesperson from the association is said to have stated that the growth in the level of imports during the last three years have resulted in weak domestic demand for copper refiners.

The infrastructure inefficiencies plants being older than that of the international competitors, higher costs of raw materials and higher interest rates compared with global markets, among others, were said to have resulted in increase of costs by the Indian refiners.

Higher costs of operations at the Indian ports and freight costs to the consumer markets, in comparison with the costs by the key competitors like Japan, South Korea, Indonesia, Vietnam, among others, were also said to have raised concerns for the Indian copper exports in the international markets.