
Copper experienced a significant increase yesterday, rising by 3.38% to reach Rs 990.05, driven by renewed concerns regarding supply following several disruptions that impacted market expectations. The recent mud-flow incident at Indonesia’s Grasberg mine has resulted in a suspension of operations, with a return to full-scale output anticipated no sooner than early 2027. Freeport-McMoRan has revised its 2026 sales guidance downward by 35%, which has generated a wave of bullish sentiment.
In the interim, LME warehouse stocks have decreased to slightly over 140,000 tons, marking their lowest level since August. Concurrently, Chile’s production experienced a nearly 10% decline year-on-year in August, attributed to an earthquake that interrupted operations at Codelco’s El Teniente site. Notwithstanding these limitations, the global refined copper balance continues to exhibit surpluses during specific months. The International Copper Study Group indicated a surplus of 57,000 tons in July, contrasting with a deficit of 14,000 tons in June. In the initial seven months of this year, the market reflects a surplus of 101,000 tons, a reduction from the 401,000-ton surplus recorded in the same period last year.
Nonetheless, reductions in supply have compelled financial institutions to adjust their forecasts. Goldman Sachs has revised its mine supply forecasts for 2025–26, anticipating a decline exceeding half a million tons attributed to disruptions at Grasberg. Citi has revised its short-term copper forecast upward to $10,500 per ton, anticipating that prices may surge to a range of $12,000–14,000 in the coming year, driven by an expected market deficit of 400 kilotons.
Copper is currently experiencing short covering, as evidenced by a 3.33% decline in open interest to 7,435, alongside a price increase of Rs 32.4. Immediate support stands at Rs 972.4; a decline below this level could lead to a test of Rs 954.8. Conversely, resistance is identified at Rs 1000.6, with a breakthrough potentially propelling prices toward Rs 1011.2.