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Informist, Tuesday, Mar. 11, 2025

MUMBAI – After a surplus in 2024, the global copper market is expected to record a deficit in 2025, as growth in demand will be higher than production growth, India Ratings and Research said in a virtual press conference on Tuesday. Before 2024, the copper market was in a deficit for five years.

The growth in demand for copper and aluminium will be driven by an accelerated transition to green energy, Shradha Saraogi, associate director, India Ratings and Research, said.

India will continue to be a net importer of copper this year but the gap would narrow as production of the red metal will rise at a higher pace than the growth in consumption, Saraogi said, adding that in the first eight months of FY25, copper production in the country rose 11% on year, while imports declined 22%.

The tightness in the copper concentrate market is likely to continue in 2025, primarily because of the reduced productivity of ageing mines.

The global aluminium market will remain in a deficit this year because of lower production. The growth in output will primarily be driven by China, which accounts for over half the global production, Saraogi said. The production capacity in China is capped at 45 million tonnes. In 2024, aluminium production in China stood at 43.3 million tonnes.

The rate of consumption of aluminium is increasing in the domestic market, driven by the green energy transition and more sustainability-driven sectors such as packaging, transportation, construction segments and EV proliferation, Saraogi said. India is a net exporter of aluminium.

The supply deficit in the zinc market will narrow as the growth in the production would be higher than the growth in consumption. "Production was hampered in FY25 because of various supply challenges," Saraogi said. The market was in a deficit of 62,000 tonnes in 2024.

"...we expect that the domestic demand (for zinc) as well as the global demand is likely to remain stable mirroring the pattern how steel would be moving," Saraogi said.

Domestic demand for the metal is likely to be strong due to increased government spending in the infrastructure segment and higher focus of the Indian railways in increasing more galvanised rail lines. Zinc is used for galvanisation.

In terms of prices, India Ratings has maintained a neutral outlook for the base metals segment. Prices are likely to be volatile in the short term because of the announcement of tariffs on imports of the metals by the US. However, "it (tariffs) would lead to a supply chain reorientation rather than the prices being impacted for a very long time", Saraogi said.  End

Reported by Ashutosh Pati

Edited by Avishek Dutta

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