Copper prices experienced a decline, closing 0.36% lower at Rs 1308.5, influenced by a robust U.S. dollar and diminishing worries regarding the prompt enforcement of U.S. tariffs on essential minerals. U.S. President Donald Trump indicated a temporary halt on tariffs concerning rare earths, lithium, and other essential minerals, which affected market sentiment, despite copper’s continued presence on the U.S. critical minerals list. Despite the decline, the downside was mitigated by ongoing inflows of copper into the United States, where elevated local premiums in anticipation of potential future tariffs have constrained availability in other regions.

At a fundamental level, developments on the supply side continue to present a mixed picture. Chile’s copper production is projected to increase to 5.5–5.7 million tons by 2026; however, short-term disruptions continue to pose challenges. In November, Codelco experienced a 3% year-over-year decrease in production, whereas BHP’s Escondida saw a more significant decline of 12.8%, which was somewhat mitigated by slight increases at Collahuasi.

Tightness was evident on the LME, where registered inventories dropped 22% to a six-month low as metal continued to flow to the U.S., pushing the cash-to-three-month premium to $64 per ton. In contrast, the fundamentals in China exhibit a softer stance, as evidenced by a 24.2% increase in SHFE inventories, indicative of surplus exports coupled with a lackluster appetite for imports.

From a technical perspective, the market is experiencing renewed selling pressure, as evidenced by a 2.5% increase in open interest, which suggests the establishment of new short positions. Copper exhibits support at Rs 1289.9; a decline below this level may lead prices to test Rs 1271.2. Resistance is identified at Rs 1319.5, and a breakout may pave the way toward Rs 1330.4.