Copper yesterday concluded with a 0.40% increase at Rs 910.25, buoyed by short covering; however, the upward momentum was restrained by escalating inventories and a sluggish global economic environment. Data from the Shanghai Futures Exchange indicated a 12.5% increase in inventories, reaching the highest level since June at 105,814 tons, while LME stocks experienced a significant surge of 56% over the past three months.

Chinese consumers are replenishing their supplies in anticipation of the public holiday from October 1 to 8, although overall activity is expected to remain muted. Citi forecasts that refined copper consumption will increase by 2.9% in 2025, reaching 27.5 million tons. This shift is expected to transition the global market from a surplus of 63,000 tons this year to a deficit of 308,000 tons. Supply-side dynamics introduced a variety of signals.

In early September, China experienced a 5% decline in copper output, leading to a reduction in global refined supply by approximately 500,000 tons, which was somewhat mitigated by production increases in Chile. Codelco’s production increased by 6.4% to reach 118,500 tons in July, whereas Escondida experienced a 7.8% rise, totaling 114,800 tons. In contrast, Collahuasi experienced a production decline of 27.2%, resulting in a total output of 34,200 tons. The ICSG indicated a global surplus of 36,000 tons in June, a reduction from the 79,000 tons recorded in May. The first half of 2025 reflects a surplus of 251,000 tons, in contrast to 395,000 tons during the same period the previous year.

In terms of trade dynamics, China’s imports of copper concentrate experienced an 8% increase in August, totaling 2.76 million tons. For the first eight months of the year, imports reached 20.05 million tons, a rise from 18.59 million tons during the same period last year. Immediate support is positioned at Rs 906.2, with additional weakness potentially testing Rs 902.2. Resistance stands at Rs 912.8, and a breakout above this level could aim for Rs 915.4.