Copper experienced a notable increase, closing higher by 1.47% at Rs 1,156.6, bolstered by constricting supply dynamics and strong macroeconomic performance in the United States. The US economy experienced its most rapid growth in two years in the third quarter, propelled by robust consumer spending, exports, and industrial activity, which supports demand from sectors that heavily utilize copper.
Supply-side concerns have heightened due to years of underinvestment, ongoing mine disruptions, and intentions by China’s leading smelters to reduce output by more than 10% in 2026 in response to unfavorable processing fees. Trade uncertainty and the risks associated with US tariffs have prompted pre-emptive stockpiling, especially for shipments destined for the US. Concurrently, a weaker dollar and anticipations of additional Federal Reserve rate cuts have bolstered speculative interest.
Structurally, long-term demand remains strong, driven by electric vehicles, renewable energy, power grids, and artificial intelligence infrastructure, while the resilience in other base metals further supports overall market tightness. Data indicated a refined copper surplus of approximately 122,000 tons during the initial ten months of 2025, even as apparent usage increased by 5.5%. In November, China experienced a second consecutive month of declining imports, a trend attributed to elevated prices and a diminished appetite for imports. Concurrently, Yangshan premiums have decreased, indicating a reduction in demand for imported materials. Simultaneously, an increase in the diversion of refined copper to the US has resulted in Comex inventories reaching unprecedented levels.
From a technical perspective, the market is experiencing short covering, as evidenced by a significant decline in open interest, which fell by 36.15% to 2,775, coinciding with a price increase of Rs 16.75. Copper exhibits support at Rs 1,144.4; a breach of this level may lead to a test of Rs 1,132. Resistance is identified at Rs 1,168.6, and a breakout could propel prices towards Rs 1,180.4.