Copper companies cowed down

Reduction in customs duty will affect primary copper producers

The reduction in the customs duty on copper from 35% to 25% will lead to the reduction in the domestic prices of copper, thereby affecting the margins of primary copper producers.

Domestic Copper prices mirror the international copper prices, except that the domestic prices are higher after partially factoring in the import duty on copper.

Now that the import duty has been reduced, accordingly the domestic copper prices needs to be revised downwards.

As a result, the margins of the copper industry are likely to be adversely affected. Indo Gulf Corporation, Sterlite Industries and Hindustan Copper will see their margins under pressure.

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