3 Min Read
NEW DELHI (Reuters) - India's No.1 refined copper producer Sesa Sterlite Ltd SESA.NS will shut its smelter for 22 days starting April 26, two company sources said on Tuesday, in what would be the first maintenance closure in four years and cut supplies to top buyer China.
Sesa Sterlite, a unit of billionaire Anil Agarwal-controlled Vedanta Resources Plc (VED.L), produces 30,000 tonnes of refined copper per month and exports half of that to China.
"We were to close the plant last year for maintenance but could not because of the forced shutdown on environmental grounds," one of the sources said, referring to a closure of more than two months from March 30 on complaints of emissions.
The shutdown next month could help support global copper prices, which fell to three-and-a-half-year lows last week on fears that a domestic bond default in top consumer China could cause copper financing deals to unravel.
It will help rival producer Hindalco Industries (HALC.NS) raise sales. The shutdown was confirmed by a second source. Both sources declined to be named because they are not authorised to talk to media.
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 said falling prices were not an issue for the company as its sales were hedged.
He added that the slowdown in China has not had any impact on exports so far.
"We're able to export the full quantity, that's not an issue," Ramnath told Reuters by phone from Tamil Nadu, where the plant is based.
"Nobody has approached us to cancel any contract or anything."
Sesa Sterlite's smelter closure last year had created a shortage for Indian cable makers such as Finolex Cables Ltd (FNXC.NS) and Precision Wires India Ltd (PRWR.NS) and raised imports. An environmental court later allowed the plant to be restarted.
Editing by Muralikumar Anantharaman