Copper prices experienced a modest increase, closing up 0.28% at Rs 1,114.85, bolstered by robust production data from China and ongoing apprehensions regarding potential supply constraints in the future. In November, China’s refined copper production experienced a significant increase, rising by 11.9% compared to the same month last year, reaching 1.24 million tons. This figure also represents a 2.7% uptick from October, effectively reversing a two-month downward trend.
Despite enhanced production levels, advancements were constrained by a stronger U.S. dollar and persistent apprehension regarding short-term demand, as evidenced by China’s copper imports, which fell for the second consecutive month in response to high prices. Fundamentals continue to exhibit a positive outlook over the medium to long term. Constraints in mine supply persistently support price levels, as analysts emphasize the structural challenges associated with new supply.
LME copper has experienced an increase of approximately 33% this year, achieving consecutive record highs driven by anticipated supply deficits. The International Copper Study Group reported a refined copper market deficit of 51,000 tons in September, contrasting with a surplus in August, while the cumulative surplus for the first nine months experienced a significant year-on-year contraction. Anticipations of a more constrained refined supply were bolstered following the agreement among China’s leading smelters to reduce production by 10% in 2026. On the trade front, copper flows have redirected toward the U.S. to exploit Comex-LME arbitrage, resulting in Comex warehouse stocks reaching unprecedented levels.
From a technical perspective, the market is experiencing short covering, evidenced by a 7.94% decline in open interest to 6,455, coinciding with a price increase of Rs 3.15. Immediate support is identified at Rs 1,110.1, with additional downside potential at Rs 1,105.3. Resistance is positioned at Rs 1,119.6, and a breach above this level may lead to a test of Rs 1,124.3.