Icra Sees 10-12% Copper Demand Growth in India over Next 2 Years

The country's domestic copper consumption is likely to grow at 10-12 per cent annually over the next two years, though at a moderated pace from the 14-15 per cent surge seen in the first seven months of FY26, due to higher prices of metal tempering near-term demand, Icra said on Friday.

Copper usage in India is surging, driven by rapid urbanisation, infrastructure development, and the green energy transition.

"Domestically, higher copper prices are likely to temper near-term demand growth, even though underlying demand drivers remain healthy," the rating agency said in a statement.

Over the medium-term, copper demand is expected to be increasingly driven by energy-transition-linked applications, including renewable energy, power grids, data centres and electric vehicles, it added.

On the supply side, the domestic refined copper deficit is projected to gradually narrow with announced capacity additions and improving supply adequacy.

The rating agency said it also expects margin trends across the copper value chain to diverge, with upstream copper entities benefiting from firm prices and supporting operating profitability.

However, downstream smelting and refining entities are likely to face margin pressure due to sharply lower treatment charges, with credits providing only partial offset, it said.

Global copper prices have recorded a sharp uptrend in the current fiscal year, reaching around USD 13,000 dollar per tonne by January 2026, reflecting an increase of nearly 40 per cent since the beginning of the fiscal year.

The rally has been driven by persistent mine-side supply disruptions, declining ore grades, and inventory dislocations across exchanges.

Tariff-related uncertainties in the US and the risk of renewed trade actions have led to inventory build-ups at COMEX and drawdowns at LME, tightening ex-US availability and supporting prices.