Copper prices concluded the trading session with an increase of 2.04%, reaching a settlement at Rs 1313.3, driven by supply-side concerns that overshadowed the mixed macroeconomic indicators. Sentiment was bolstered by disruptions in critical producing areas, notably Chile, where Capstone Copper revealed that operations at its Mantoverde mine would be reduced to approximately 30% capacity due to strike action by Union #2, which represents about half of the workforce at the site.

In a further development contributing to supply constraints, Chile’s copper production experienced a decline of 7.18% year-on-year in November. Concurrently, operations at Freeport-McMoRan’s Grasberg mine in Indonesia remain suspended following a tragic incident, affecting nearly 3% of the global supply. Low inventories in LME-approved warehouses, coupled with elevated Yangshan premiums earlier in the month, have further underscored near-term supply concerns.

In December, China’s factory activity experienced an unexpected expansion, breaking an eight-month streak of contraction. This improvement was bolstered by pre-holiday orders and policy measures aimed at stabilizing growth.  Nonetheless, the potential for further gains was limited as the US Manufacturing PMI declined to 51.8 in December, indicating the slowest expansion in the ongoing growth cycle. In November, China experienced a decline in copper imports for the second consecutive month, indicative of price sensitivity; however, imports of concentrate remained robust.

From a technical perspective, the market is experiencing new buying activity, as evidenced by a 0.27% increase in open interest to 14,263, coupled with a price gain of Rs 26.2. Copper exhibits support at Rs 1297.6; a decline beneath this level could see prices approach Rs 1281.9. Resistance is identified at Rs 1324.5, and a persistent advance beyond this level may pave the way toward Rs 1335.7.