75% Copper Price Surge Puts Coimbatore Engineering MSMEs Under Margin Pressure

Chennai, Sep 17 (KNN) Copper prices in Coimbatore have surged nearly 75 per cent over the past year to around Rs 1,450 per kg from Rs 800-900, putting pressure on the competitiveness of engineering MSMEs in the major industrial cluster.

Copper prices had touched Rs 1,500 per kg earlier this year before moderating slightly. The metal is a key input for industries manufacturing automobile components, electric vehicles, pumps, renewable energy equipment and electronic parts.

Limited Scope To Pass On Cost

V. Rangaswamy, president, Coimbatore District Small Industries Association, said MSMEs could absorb a price increase of less than 10 per cent, but have been able to pass on only around 10-15 per cent of the recent copper cost increase to customers, reported The Hindu.

“MSMEs fix prices once a year or once in two years. Hence, they are unable to pass on the hike fully to customers,” he said, adding that higher steel, zinc and petroleum-based input costs were further eroding margins and competitiveness.

Rangaswamy said raw material bank schemes offered limited relief as copper is too valuable and risky for MSMEs to store in large quantities.

Recycled Copper, Coated Wires Gain Ground

India imports almost all of its copper requirements, while the US and China remain major global consumers. Industry sources said the sharp rise in prices has increased the use of recycled copper among local manufacturers.

Jayakumar Ramadas of Mahendra Pumps said copper-coated wires are also becoming more common among pumpset manufacturers.

“We tell our customers whether the wires used are copper or copper coated and have priced the pumps accordingly,” he said, adding that industrial applications are likely to gradually adapt to copper-coated products as technology evolves.

(KNN Bureau)