India’s Copper Industry Faces Triple Whammy Thanks To Trump, China

Billionaire Kumar Mangalam Birla, chairman of Hindalco Industries (Hindalco), India’s largest copper company, in a recent address, noted that merchandise trade, which has long been the engine of global growth, now faces an uncertain future.

Perhaps uncertain enough to warrant a strong vigil from Birla’s team at Hindalco, and that of his rivals in the domestic copper industry — Adani Enterprises.

While the direct hit from US president Donald Trump’s 50% tariffs is limited — India exports $360 million worth of semi-finished copper to the US annually — the industry faces a triple whammy thanks to a mix of global factors.

US tariff volatility is weighing in on global prices, China pushing for lower treatment and refining charges (TCRCs), and Indonesia’s looming ban on copper concentrate exports could put India’s copper industry at risk.

According to industry executives and analysts, in addition to Washington–Beijing, London and Jakarta, are all important pieces to India’s copper story.

Trump Tariff And LME Fallout

The United States’ surprise exclusion of certain copper segments from the anticipated tariffs on copper imports upended market expectations.

On July 30, Trump imposed a 50% tariff on the import of semi-finished copper products, excluding refined copper, along with ores, concentrates, anodes, and scrap — a move that effectively crashed the US copper market.

How copper prices move on the LME decides what kind of revenue Indian copper companies can expect.

After rallying by 30% in July 2025, US Comex copper futures corrected sharply by 20% after the tariff announcement.

The 50% US tariff on semi-finished copper products and not raw materials erased the previous COMEX premium over London Metal Exchange (LME) prices, explained executives at BigMint, a commodity market intelligence firm

“The arbitrage (profit from price differences) between US and international markets has vanished, prompting US stockpiled copper to potentially flow back into LME warehouses and weigh on global prices,” executives from BigMint noted.

JPMorgan projects LME benchmark copper prices to slip to an average of $9,100/t in the third quarter (ending September 2025) from $9,480/t in April-June on a projected easing of US imports and a consequent multi-month destocking cycle in the country.

A weak LME is not-so-great news for Indian copper smelters, as it is a benchmark to decide what refined copper sells at.

China’s TCRC Flex

China has leveraged its scale as the world’s largest copper consumer to negotiate really low treatment and refining charges amid tight global supply because of mine shutdowns in Panama, Peru and Chile.

“This has put pressure on refining margins and may impact earnings for Indian producers, potentially affecting overall profitability in the near to medium term,” said Satnam Singh, senior practice leader & director at Crisil Intelligence. Indian smelters also rely on these benchmark-linked rates, exposing them to sharply negative TCRCs. 

For instance, Hindalco’s copper earnings were down 21% in the quarter that ended in March 2025, which Satish Pai, managing director for the company, attributed to the TCRC weakness.

“The annual TCRC benchmark for 2025 saw a 73% year-on-year decline. Concentrate markets continue to be extremely tight, resulting in declining spot TCRC terms. The market is expected to remain under pressure in the short to medium term until market rebalances,” Pai noted in May.

The Indonesian Puzzle

India imports more than 80% of its copper concentrate and Indonesia is among one of the largest exporters of copper concentrates — a raw material required to make refined copper — to India. India imported more than 166 KT of copper concentrates from Indonesia in FY25, making the island nation the second-largest copper ore/concentrate exporter to India.

However, this stands to change in the coming months as the country has proposed a ban on the export of copper concentrates to boost its domestic industry.

“So, Indian copper companies will now need to look for other suppliers. India has zero duty on copper concentrates imports, which allows domestic companies to explore other geographies as suppliers," said Mayur Karmarkar, managing director for International Copper Association India.

He added, with Trump exempting copper concentrates in his recently announced tariffs, "US Copper tariffs will now not have any bearing on the concentrates available in the global market. That is now the status quo, against earlier apprehensions over it."

Domestic Bottlenecks

While copper sizzles globally, India has had its own share of new developments. India’s copper smelting industry is dominated by three players — Hindalco (with 5 lakh lakh tonne per annum or TPA of refined copper), Vedanta’s Sterlite Copper (4.6 lakh TPA capacity, but currently non operational), and the newest entrant, Adani Enterprises owned Kutch Copper (5 lakh TPA), but still a year away to ramp up to its full capacity. Hindustan Copper is India’s only copper miner.

Trade bodies like the Bombay Metal Exchange (BME) have warned of “real and immediate shortages”. The government has put in a quality control order (QCO) restricting refined copper imports from only companies that have a Bureau of Indian Standards (BIS) certification. This is only adding to the challenges of the copper industry.

BigMint cautioned that prolonged supply chain disruptions can only be avoided if BIS certification for major Japanese and other foreign suppliers is sped up. Additionally, “a full ramp-up of major new domestic production facilities and the government's willingness to further adapt or relax the QCO” will also decide the future of India’s copper industry

They noted that Japan's seven QCO applicants represent the backbone of past import flows, but industry sources say some Japanese firms are considering exiting India over burdensome certification and high compliance costs.

“As global supply chains become increasingly asymmetric, India must fast-track strategies like development of domestic resources, diversified sourcing, developing domestic scrap ecosystem and policy-led resilience to reduce dependence and protect long term sectoral profitability,” said Singh from Crisil.