Copper Prices Jump 57%, Aluminium 35%: What It Means for Consumer Durables and Electronics

Copper and aluminium have become a major cost problem for India’s consumer-durables and electronics industries just as companies enter the country’s most important festive-sales period. According to a sector assessment cited by Financial Express, copper prices were up 57% year on year in Q2 FY27, aluminium prices rose 35% and polymers increased 34%, putting pressure on manufacturers’ margins.

The immediate response is already visible in retail prices. Appliance makers including LG Electronics India, Voltas, Daikin, Godrej and Havells have announced or implemented price increases across categories, while Samsung has raised prices on several television models. The broader industry is now trying to pass on higher input costs without damaging demand during Navratri and Diwali.

Key takeaways

• Copper prices were up 57% year on year in Q2 FY27, according to the sector data cited by Financial Express.
• Aluminium increased 35%, while polymers rose 34%.
• The cost shock is hitting air-conditioners, refrigerators, washing machines, fans, TVs, wires, cables and electronics manufacturing.
• Appliance makers have already announced several rounds of price increases in 2026.
• LG Electronics India announced 5–7% price increases across ACs, TVs and home appliances from October 1.
• Daikin India announced increases of 6–10%, while Voltas communicated a 5–7% increase in AC prices.
• Electronics retailers are increasingly using no-cost EMI, cashback and exchange offers to prevent higher sticker prices from destroying demand.
• Manufacturers are responding through material substitution, localisation, sourcing efficiencies and value engineering.
• Nomura expects the broader consumer-durables sector to deliver 15% revenue growth and 20% EBITDA growth, despite the input-cost pressure.
• The key issue for the festive season is no longer simply demand. It is whether manufacturers can pass on enough of the commodity inflation without sacrificing volumes.

Why copper and aluminium matter so much

Copper and aluminium are not just commodities sitting somewhere in a manufacturer’s procurement department.

They are physical building blocks of many products consumers use every day.

Copper is used extensively in electrical wiring, motors, compressors, transformers and other electrical components. Air-conditioners, for example, require substantial amounts of copper in their refrigeration and electrical systems.

Industry executives cited by Business Standard and The New Indian Express have put copper usage in a typical air-conditioner at around 3–4 kg, although the precise quantity varies by product and design.

Aluminium is increasingly important as well.

It is used in electrical applications, heat-management components, motors, structural parts and appliances. In some lower-cost products, manufacturers are also using aluminium as a substitute for copper where engineering requirements permit.

That creates a direct link between metal prices and manufacturing economics.

When copper becomes significantly more expensive, manufacturers have three broad choices:

1. Absorb the additional cost.
2. Pass the cost to consumers through higher prices.
3. Redesign the product or substitute materials to reduce the amount of expensive input required.

Companies are increasingly using all three strategies simultaneously.

The Q2 FY27 commodity shock

The numbers illustrate why the pressure has become difficult to absorb.

Input	Q2 FY27 YoY increase
Copper	57%
Aluminium	35%
Polymers	34%

Source: Sector data cited by Financial Express; increases are year-on-year and refer to Q2 FY27.

The important point is that these increases are much larger than what most manufacturers can comfortably absorb without affecting profitability.

A company may be able to manage a small increase in raw-material costs through procurement savings.

A 30–50% increase in a major input is different.

At that level, manufacturers have to rethink pricing, product specifications, sourcing and inventory.

Appliance prices are already rising

The commodity shock has moved beyond manufacturers’ balance sheets and into retail prices.

The Economic Times reported that LG Electronics India planned a 5–7% increase across air-conditioners, televisions and home appliances from October 1.

Voltas communicated a 5–7% increase in AC prices, while Daikin India planned increases of 6–10%. Godrej communicated increases of 4–6%, while Havells was around 5%. Samsung had already increased prices across several television sizes by ₹1,000–₹10,000.

These are not isolated adjustments.

ET reported that the October increases represented another broad round of price revisions, with cumulative increases across some categories reaching the mid-to-high teens since January.

That creates a difficult timing problem.

The latest price increases are arriving immediately before Diwali.

Festive sales are among the most important periods of the year for consumer electronics and appliances, meaning companies need to protect both margins and volumes at the same time.

Why companies cannot simply absorb the cost

At first glance, absorbing higher commodity costs might seem like the easier option.

It would allow companies to keep retail prices unchanged and protect demand.

The problem is margin compression.

If the cost of producing an appliance rises substantially while the selling price remains unchanged, gross margins decline.

Companies can sometimes offset this through:

• Better sourcing
• Lower logistics costs
• Manufacturing efficiencies
• Product redesign
• Higher capacity utilisation
• Premiumisation
• Lower promotional spending

But these measures have limits.

Blue Star Managing Director B Thiagarajan told ET that industry margins had moved from double-digit levels toward single digits as input costs increased, while manufacturers were unable to pass the entire increase on to consumers.

That explains why price increases are becoming increasingly difficult to avoid.

The festive season creates a second problem

The timing could hardly be more sensitive.

Companies are entering Navratri and Diwali with higher manufacturing costs but consumers are also becoming more price conscious.

The festive period is traditionally a major purchasing window for refrigerators, televisions, air-conditioners, washing machines and other appliances.

ET estimated that Navratri-to-Diwali can account for roughly 25–30% of annual offtake for consumer electronics and appliances.

That makes the next few weeks especially important.

A manufacturer that raises prices too aggressively could lose volume.

A manufacturer that keeps prices low could protect market share but sacrifice margins.

This is why the industry is increasingly relying on financing and promotional tools rather than simply cutting prices.

No-cost EMI is becoming a margin-protection tool

The consumer may see a higher retail price, but manufacturers and retailers are increasingly trying to make the monthly payment look manageable.

No-cost EMI, cashback, exchange bonuses and bundled accessories can reduce the psychological impact of a higher sticker price.

Mint reported that these financing and promotional mechanisms are helping retailers maintain demand even as appliance prices rise.

This is particularly relevant for expensive purchases.

A consumer may hesitate to spend ₹70,000 on a refrigerator or television, but a manageable monthly payment can make the same product feel more affordable.

The strategy allows companies to maintain a higher listed price while supporting conversion at the point of sale.

Entry-level products face the greatest pressure

Higher prices do not affect all consumers equally.

Premium buyers may be more willing to absorb a ₹5,000 or ₹10,000 increase if the product offers better technology, design or energy efficiency.

Entry-level buyers have much less flexibility.

For them, a relatively small increase in the final price can change the purchasing decision.

That creates a difficult strategic question for manufacturers.

Should they increase prices uniformly across their portfolios?

Or should they protect entry-level products and recover more of the cost through premium models?

Some manufacturers are choosing the second approach.

Mint reported that companies are using product simplification and “de-contenting” to protect entry-level price points, including removing non-essential finishes, accessories or packaging while protecting important components such as compressors and motors.

The strategy effectively shifts the focus from simply increasing prices to reducing the cost of the product itself.

Copper-to-aluminium substitution is accelerating

One of the most important changes happening behind the scenes is material substitution.

Economic Times reported that manufacturers are increasingly using aluminium instead of copper in selected applications, including motors used in fans and components in entry-level air-conditioners and refrigerators.

The reason is straightforward.

If copper becomes significantly more expensive than aluminium, engineers have an incentive to redesign components around the cheaper material where performance requirements allow it.

But substitution is not automatically possible.

Copper and aluminium have different electrical and physical characteristics.

A manufacturer cannot simply replace one with the other without considering conductivity, heat dissipation, weight, durability, component size and reliability.

That is why value engineering has become an important part of the industry’s response.

What is value engineering?

Value engineering means redesigning a product to deliver the required performance at a lower cost.

It can involve:

• Using less material.
• Replacing an expensive material with a cheaper alternative.
• Simplifying components.
• Redesigning packaging.
• Removing features that customers do not value enough to pay for.
• Localising components.
• Improving manufacturing yields.

The objective is not necessarily to make a cheaper product.

It is to reduce the cost of producing the same commercially acceptable product.

This becomes particularly valuable when companies cannot pass the entire raw-material increase to consumers.

Localisation is becoming more important

The commodity shock is also strengthening the case for local manufacturing of components and materials.

Economic Times reported that electronics companies are accelerating localisation efforts as commodity inflation and supply-chain pressures increase. LG Electronics India, for example, has localised a resin used in plastic-moulded components that it previously imported.

This has two advantages.

First, local sourcing can reduce exposure to international freight costs and currency fluctuations.

Second, companies gain greater control over supply availability.

The issue has become especially important because India’s electronics industry still depends significantly on imported components and materials.

Moneycontrol reported earlier this year that shortages in copper-clad laminates and other PCB inputs were putting pressure on electronics production, with industry bodies warning about supply constraints linked partly to demand from AI data centres and other technology sectors.

That means today’s problem is not simply “metals are expensive.”

It is a broader supply-chain problem.

AI is competing for the same industrial resources

The AI infrastructure boom is another factor reshaping commodity demand.

Data centres require enormous amounts of electricity, power equipment, cables, cooling infrastructure and electronics.

Copper is particularly important because it is widely used in electrical infrastructure.

At the same time, AI servers require large quantities of advanced electronic components and printed circuit boards.

Moneycontrol reported that Indian electronics manufacturers were facing tighter PCB raw-material availability as AI infrastructure, 6G, EVs and other industries competed for capacity.

This creates a structural challenge for consumer electronics manufacturers.

They are not competing only with other appliance makers for materials.

They are competing with rapidly expanding industries that are themselves investing billions of dollars in infrastructure.

Wires and cables have a different experience

Not every company exposed to copper and aluminium is necessarily hurt by higher prices.

Wires and cables manufacturers can sometimes pass higher metal prices directly into selling prices.

That can increase reported revenue even if underlying volume growth is much lower.

A Q2 FY27 sector update from Prabhudas Lilladher estimated that copper was up 57.2% and aluminium 34.9% year on year, while expecting strong revenue growth for several wires and cables companies because higher realisations were supporting sales.

This is an important distinction.

For an appliance maker, higher copper prices are primarily a cost.

For a cable manufacturer, the same copper-price increase can become part of the selling price.

The economic impact therefore depends heavily on the company’s pricing mechanism and contract structure.

Air-conditioners are especially exposed

Air-conditioners sit near the centre of the commodity-cost problem.

They require copper, aluminium, steel, plastics, compressors and electronic controls.

At the same time, AC demand has been strong.

Financial Express cited sector expectations of healthy double-digit AC sales growth, creating a favourable volume environment but also exposing manufacturers to higher input costs.

The result is a race between two forces:

Demand growth versus cost inflation.

If demand remains strong, manufacturers have more pricing power.

If demand weakens, companies may have to absorb more of the commodity inflation to keep volumes moving.

Voltas is particularly exposed in the near term. Financial Express reported that Nomura expects its margin at only around 3.6%, highlighting how difficult it can become to protect profitability when costs rise faster than prices.

Electronics manufacturing is more mixed

The picture is different for electronics manufacturing services and component companies.

Dixon Technologies is expected by Nomura to ship around 9.5 million phones during the period, while Avalon Technologies is projected to record around 35% revenue growth. Kaynes Technology, however, is expected to lag because of slower smart-meter activity.

This shows why commodity inflation should not be treated as a uniform sector problem.

Companies with strong order books, high utilisation, better procurement and greater pricing power can potentially manage the shock better than businesses with weaker demand or lower margins.

Nomura still expects sector growth

Despite the cost pressures, Nomura’s sector outlook remains relatively constructive.

Financial Express reported that the brokerage expects approximately 15% revenue growth and 20% EBITDA growth for the consumer-durables sector, with margins improving slightly to around 8.6%.

This is a forecast, not reported sector-wide financial performance.

That distinction matters.

The forecast implies that strong demand, pricing and operating efficiencies could offset much of the commodity inflation.

In other words, higher raw-material prices do not automatically mean that the entire industry will see lower profits.

The companies with the strongest ability to pass through costs could actually report higher nominal revenue.

Premiumisation is helping manufacturers

Another important trend is premiumisation.

Consumers who are still willing to spend are increasingly choosing higher-end products with better energy efficiency, larger screens, connected features or advanced technology.

That can help manufacturers offset higher input costs because premium products generally carry higher absolute margins.

LG Electronics India’s Q1 FY27 results provide an example of this trend.

The company reported revenue of ₹7,233 crore, up 15.5% year on year, while net profit increased 27.2% to ₹653 crore. It attributed the performance partly to premium demand across categories.

This suggests that consumers have not simply stopped buying.

Instead, purchasing behaviour is becoming more segmented.

Consumers may delay purchases rather than downgrade

One of the more interesting effects of higher prices could be a longer replacement cycle.

If a consumer believes a refrigerator or television has become too expensive, they may not necessarily buy a cheaper model.

They may simply continue using their existing product for another year.

Mint cited analysts expecting consumers to stretch replacement cycles, particularly when prices rise faster than incomes.

That is potentially more damaging for manufacturers than a simple shift between premium and entry-level products.

A delayed purchase means no sale at all.

This is why the industry is trying to maintain the perception of value through financing, exchange offers and promotions.

What it means for Indian consumers

For consumers, the immediate implication is straightforward: appliances and electronics are becoming more expensive.

The biggest impact is likely to be seen in categories that use large amounts of metals or other inflation-sensitive inputs.

Air-conditioners are particularly exposed because of copper usage.

Televisions and smartphones face additional pressure from memory and electronic components, while refrigerators and washing machines are affected by metals, plastics and electronics.

Business Standard reported that AC prices were expected to rise 5–8%, while TVs, washing machines and refrigerators could see increases of around 3–4% in another round of revisions.

Consumers therefore face a trade-off during the festive season.

Buying during promotions can reduce the effective cost.

But waiting for a larger discount may not always work if manufacturers continue to raise list prices because input costs remain elevated.

What it means for manufacturers

For manufacturers, the commodity surge changes the competitive equation.

Companies with:

• Strong brands
• Higher premium exposure
• Efficient procurement
• Localised supply chains
• Strong dealer networks
• High manufacturing utilisation
• Better pricing power

are better positioned to protect margins.

Companies operating in highly price-sensitive categories may have fewer options.

They may have to absorb more costs, redesign products or accept lower margins.

This could accelerate consolidation over time.

Smaller manufacturers with limited working capital may find it particularly difficult to carry expensive inventory while waiting for higher selling prices to take effect.

Mint noted that smaller retailers also face working-capital challenges because higher product prices increase the capital required to finance inventory.

What happens after Diwali?

The festive season could temporarily hide some of the price pressure.

Dealers have already stocked products bought at older prices.

The New Indian Express reported that Godrej’s Kamal Nandi expected older-price inventory to remain in the channel for roughly one to one-and-a-half months, meaning some consumers could still find products at previous prices during the festive period.

But once that inventory clears, the higher input costs should become more visible in retail pricing.

That means the post-Diwali period may provide a clearer picture of the true demand impact.

If consumers continue buying despite higher prices, manufacturers will gain confidence to pass through more costs.

If volumes weaken sharply, companies may need to return to promotions and absorb a larger share of the inflation.

The central question: who pays for the commodity shock?

The answer will determine the industry’s earnings over the next several quarters.

There are effectively four possible outcomes.

Consumers pay: Retail prices rise, volumes remain relatively resilient and manufacturer margins are protected.

Manufacturers pay: Prices remain stable, but margins decline.

Suppliers pay: Manufacturers negotiate lower input costs or shift sourcing.

Engineering pays: Companies redesign products to use less expensive materials.

In reality, India’s consumer-durables industry is using all four approaches.

That is why the headline commodity increases should not be translated directly into equivalent appliance price increases.

A 57% increase in copper does not mean an air-conditioner becomes 57% more expensive.

Copper is only one component of the total bill of materials, and manufacturers can also hedge, substitute materials, reduce usage, renegotiate sourcing and absorb part of the increase.

The Bigger Picture

The copper and aluminium surge is exposing a structural change in India’s consumer-electronics economy.

Manufacturers are no longer operating in an environment where raw materials can be treated as a stable background cost. Commodity prices, freight, currency movements, AI infrastructure demand and geopolitical disruptions are increasingly connected.

That makes supply-chain management a competitive advantage.

The companies that can localise components, redesign products, secure long-term supplies and maintain pricing power will be better positioned than companies relying primarily on low manufacturing costs.

The pressure is also arriving at an important moment for India.

Consumer durables are benefiting from rising electrification, premiumisation, household incomes, air-conditioner penetration and electronics adoption. But those structural growth drivers are now being tested by a sharp increase in the cost of producing the products themselves.

Looking Ahead

The next major test will come after the festive season, when older inventory is replaced by products manufactured at higher input costs. If copper, aluminium and polymer prices remain elevated, another round of price increases could follow, particularly in ACs and other metal-intensive appliances.

For consumers, financing and exchange offers may soften the immediate impact, but they cannot permanently eliminate higher manufacturing costs. For manufacturers, the winners will increasingly be those that combine pricing power with localisation, material substitution and efficient supply chains rather than simply passing every increase on to customers.