Copper futures experienced a rally of 2.42%, reaching Rs 1111.85. This movement was bolstered by the U.S. Federal Reserve’s decision to implement a quarter-point rate cut, alongside persistent outflows of copper directed towards U.S. warehouses, which heightened apprehensions regarding supply constraints in other regions. The depreciation of the dollar following the Federal Reserve’s decision contributed to the prevailing positive momentum. On the macro front, China indicated ongoing fiscal support and a supportive monetary policy for 2026, despite the presence of mixed economic indicators, as consumer inflation increases while factory-gate prices continue to experience deflation.

Data indicated a notable increase in copper stocks originating from China, which surged to 130,225 tons in November, up from 100,400 tons, bolstered by a favorable arbitrage that stimulated exports. The proportion of Chinese copper on LME warrant increased to 85%. In light of these movements, the underlying fundamentals have shifted, with the global refined copper market recording a deficit of 51,000 tons in September, contrasting with a surplus of 41,000 tons in August, as reported. For the period of January to September, the surplus experienced a significant contraction, decreasing to 94,000 tons compared to 310,000 tons in the same timeframe the previous year.

In November, China’s refined copper imports decreased for the second consecutive month, totaling 427,000 tons. This decline indicates demand pressures stemming from elevated prices and a reduction in Yangshan premiums. Nonetheless, the decision by smelters to reduce output in 2026 by 10% is anticipated to further constrain the supply of refined materials.

From a technical perspective, the market is currently experiencing a phase of short-covering, as evidenced by a 12.33% decline in open interest to 7,339, coinciding with a price increase of Rs 26.25. Immediate support is identified at Rs 1093, with a breach possibly revealing Rs 1074. Resistance is established at Rs 1122.5, and a persistent advance beyond this threshold may pave the way toward Rs 1133.