Copper yesterday settled 0.55% lower at Rs 1008.5, influenced by disappointing Chinese economic data and diminishing expectations for a U.S. Federal Reserve rate cut this year. China’s factory output and retail sales experienced their slowest growth in more than a year, raising fresh concerns regarding demand in the world’s largest copper consumer and intensifying the pressure on policymakers to bolster the $19 trillion export-driven economy. Inventories in Shanghai Futures Exchange warehouses decreased by 4.9% to 109,407 tons, indicating a potential tightening in near-term availability. Speculation has risen regarding the possibility that Beijing may soon focus on the copper refining sector to address overcapacity, in light of appeals from the nation’s nonferrous metals association for stricter regulation of new smelting initiatives.
Recent production data on the supply side underscored anticipations of a more constrained market in the coming year. In September, output at Chile’s Codelco experienced a decline of 7%, whereas production at the Glencore–Anglo American joint venture saw a more significant drop of 26%. BHP’s Escondida, however, experienced a 17% increase in output. Ongoing disruptions at various mines persist in reinforcing the forecast for diminished copper concentrate supply in 2025.
The International Copper Study Group has forecasted a surplus of 178,000 tonnes in 2025, which will transition to a deficit of 150,000 tonnes in 2026. Mine output is projected to increase by 1.4% in 2025 and by 2.3% in 2026, whereas refined usage is anticipated to expand by 3% and 2.1% in the same years, respectively. In the meantime, China’s copper imports for October experienced a decline of 9.7%, totaling 438,000 tons, indicative of diminished restocking activities amid elevated prices.
Copper is currently experiencing long liquidation, as evidenced by a 0.67% decline in open interest. Support stands at Rs 1000.6, and a breach would reveal Rs 992.8. Resistance is identified at Rs 1016.1, beyond which the level of Rs 1023.8 could be approached.