Copper’s recent rally to record-highs has sent waves of concern reverberating through the makers of several consumer-focussed and industrial products such as electric vehicles (EVs), consumer gadgets and appliances, electric wires and engineering goods, among others.

Futures of the metal on the London Metal Exchange (LME), the benchmark for global prices, hit an all-time-high of $14,779 per tonne on September 8. While prices have marginally declined from that high, they remain elevated. At the time of writing Wednesday afternoon, copper futures were trading about 0.9% higher over its previous close at $14,167.67 per tonne.

Prices have rallied in the past couple of weeks as purchasers in the U.S. rush to stock up on the metal, anticipating President Donald Trump’s imposing steep tariffs on the import of refined copper.

This apprehension compounds the fact that the global economy is already navigating lower copper production in the first half of the calendar year.

India imports about 85% of its copper requirements. The cascading effect on profit margins is expected to be particularly acute for industries where copper is irreplaceable.

Cost pressures, no replacement

Copper wire manufacturers, including Finolex, Polycab and Havells, hiked prices early September seeking to mitigate some of the cost pressures.

Mahesh Viswanathan, Chief Executive Officer of Finolex Cables explained the upward trend of copper prices in the last one year has forced necessary market-wide pricing realignments across the electrical manufacturing sector.

“The initial brief trade-level destocking only reflected short-term inventory recalibration. However, the demand in power and construction sectors ensured complete absorption of the prices,” he said.

Copper is widely regarded as the ideal base material in the wire manufacturing industry because of its ability to withstand heat and being a good conductor, among other things, thus, making it difficult to place an alternative.

The same conundrum exists in the electric vehicle industry.

According to Ajay Sharma, Director-General and CEO of the Electric Vehicle Industry Alliance (EVIA), EVs use “about 3-4% more copper” than traditional combustion vehicles.

Mr. Sharma observed rising copper prices would induce pricing pressures.

He said though the industry is seeking a transition to wider use of aluminium to cut costs and make the vehicles further lighter, copper cannot be entirely replaced.

“Aluminium offers 61% of electrical conductivity of copper, thus, aluminium conductors need to be 1.6-times larger to carry the same electrical load,” he explained.

Cascading to consumer electronics, engineering goods

Makers of consumer appliances and gadgets are also keeping a close eye on copper, especially ahead of the festive season.

The same paradigm extends for engineering goods manufacturers.

Jayakumar Ramadas of Mahendra Pumps observed copper prices have become “unreasonable.”

Sanjay Chitkara, Director & Co-Chief Sales & Marketing Officer, LG Electronics India told The Hindu, “We are closely monitoring input costs and evaluating pricing in a calibrated manner, while balancing cost pressures with consumer affordability and the competitive environment.”

Although, he exuded confidence about the upcoming festive season that commenced with Onam in August to carry forward a strong momentum that centred on “good sell-out and healthy channel stocking”.

Saket Singh, an executive at Chennai-based chip design firm Aheesa, told The Hindu that there may be a price adjustment in the electronics manufacturing industry, but that it may not be a significant sum.

Supplies under pressure

A spokesperson at the Federation of Indian Mineral Industries (FIMI) told The Hindu that the global copper market is currently experiencing tightness in mine and concentrate supply, with production constraints in some major producing regions, including Chile, putting further pressure on overall availability.

“During the first half of 2026, global copper mine production and concentrate output were lower than in the corresponding period last year. At the same time, demand from power infrastructure, electrification, data centres and other industrial applications continues to support the market,” said the industry body.

FIMI noted that uncertainty over potential U.S. tariff measures on refined copper has also influenced global trade flows.

It has led to additional copper flows into the U.S. whilst bothering availability in other markets, it said.

“For India, these developments can increase the landed cost of copper. In addition to international prices, higher freight costs, vessel constraints and, where already there, longer or rerouted shipping routes will add to the delivered cost,” said the spokesperson.

Price arbitrage not working

FIMI further observed that the resulting regional price differentials have affected physical arbitrage flows between major copper futures markets, including the Shanghai Futures Exchange (SFE) and Chicago Mercantile Exchange (CME).

“While price differences normally encourage physical movement between markets, tariff expectations and regional supply conditions can temporarily redirect these flows and widen regional price differentials,” it observed.

FIMI added that these developments underline the importance for India of diversifying copper supply sources, strengthening domestic production and recycling, and developing resilient international supply chains to manage supply disruptions, trade-related uncertainty and elevated logistics costs.

(With inputs from Aroon Deep, Soundariya Preetha and Haider Ali Khan)

Published – September 16, 2026 08:58 pm IST