Force majeure is a contract clause that allows a company to miss shipments due to circumstances beyond its control.
The smelter, which produces more than 300,000 tonnes per year — over half of India’s copper output — was halted last week by local authorities at least until a hearing on April 9 into the complaints.
The shutdown could tighten supplies in the region and lift premiums if Indian consumers have to fill needs from international markets, traders said.
“It will have an impact on the need for India to import copper. It’s a 400,000 tonne smelter. They had plans to expand it, but I don’t think that is going to go ahead,” said Macquarie analyst Ryan Belshaw.
Metals traders said the shutdown could inflate copper premiums — price paid above the London Metal Exchange price to cover delivery costs, including transport and insurance.