Copper prices experienced a notable increase of 2.82%, reaching Rs 1076.55, propelled by escalating global supply concerns and robust speculative interest within a constricting market environment. Market participants have been reallocating substantial quantities of copper to the United States in anticipation of possible import tariffs, thereby exacerbating supply constraints in other key trading centers. The market has experienced turbulence due to a succession of disturbances in critical mining areas, spanning Indonesia, Chile, and the Democratic Republic of Congo, thereby amplifying concerns regarding an impending shortfall.
Current supply negotiations between Chinese smelters and miners for 2026 are characterized by tension, as miners maintain a favorable position due to unfavorable TC/RCs, compelling smelters to compensate miners in light of limited concentrate availability. China’s leading smelters have disclosed intentions to reduce output by more than 10% in 2026 as a response to overcapacity and declining processing fees.
In the meantime, Chile’s copper production in October decreased by 7% compared to the previous year, totaling 458,405 tons, which underscores ongoing supply constraints. Global inventories are experiencing a continued contraction—stocks on the Shanghai Futures Exchange fell by 11.46% last week, while LME warehouse inventories have decreased by 42% this year, heightening worries about ongoing shortages beyond the US. Market balance indicators present a nuanced picture: the global refined copper market experienced a deficit of 51,000 tons in September, following a surplus in August, yet the data for the first nine months continues to indicate a moderate surplus.
Copper is currently experiencing short covering, as evidenced by a 1.01% decline in open interest to 8,146, coinciding with a price increase of Rs 29.5. Support is identified at Rs 1056.1, with further downside potential at Rs 1035.6. Conversely, resistance is established at Rs 1090.9, and a breakout could facilitate movement towards Rs 1105.2.