Sesa Sterlite Ltd has decided to shut its smelter for 22 days starting from April 26. It produces about 30,000 tonnes of refined copper per month and exports half of that to China.
This might even support global copper prices, which fell to three-and-a-half-year lows on fears that a domestic bond default in top consumer China could cause copper financing deals to unravel. It will also help rival producer Hindalco Industries raise sales.
The closure might also lead to metal from China coming to India, with a group of large Chinese copper smelters planning to jointly boost shipments in the coming months to cope with low prices at home.
P Ramnath, head of Sesa Sterlite's copper business, declined to comment on the planned shutdown, but sated that falling prices were not an issue for the company as its sales were hedged. "We're able to export the full quantity, that's not an issue," added Ramnath.
Sesa Sterlite's smelter closure in 2013 had created a shortage for Indian cable makers such as Finolex Cables Ltd and Precision Wires India Ltd and raised imports. An environmental court later allowed the plant to be restarted.
