Wednesday’s closure of Sterlite Industries’ Tuticorin copper smelter — the world’s ninth largest — following a Madras High Court order on environmental concerns, pushed international prices of the metal to a five-month high during the day.
The Tuticorin plant produced over 334,000 tonnes of copper cathode in the year to March 2010, almost half of India’s total output of more than 683,000 tonnes. “The copper market was already looking tight, this will only add to that sense of market tightness,” said David Wilson, analyst at SocGen.
Three-month copper on the London Metal Exchange rose to $8,038 (R3,60,906) a tonne, its highest since mid-April, before declining to $8,019 (R3,60,053).
Sterlite exported 127,095 tonnes of copper in the year to March 2010, according to its annual report, and is the leading supplier to the domestic market with sales of 206,149 tonnes in the year to March 2010 — a record. It had planned to double copper smelting capacity to 800,000 tonnes per year at the Tuticorin site to take advantage of India’s growth.