Copper prices experienced a decline yesterday, closing down by 1.29% at Rs 1285.65, influenced by indications of weakening demand from the leading consumer, China. The Yangshan import premium, an important indicator of Chinese consumption, has decreased by 50% over the last month, reaching its lowest point since mid-2024. Concurrently, inventories in Shanghai Futures Exchange warehouses have surged by 18.3%, heightening concerns regarding near-term demand. Sentiment was further shaped by China’s increased oversight of high-frequency trading alongside the U.S. choice to postpone tariffs on essential minerals.

Nonetheless, the downward pressure was somewhat mitigated by ongoing supply-side risks. Disruptions in mining operations and the deterioration of ore grades persist in constraining output growth across key producing regions. In November, Peru experienced an 11.2% decline in copper production compared to the previous year, while Chile reported diminished output from significant operations, highlighted by a 12.8% reduction at BHP’s Escondida mine.

Simultaneously, the availability of copper outside the United States continues to be limited, as metal is directed towards American warehouses in anticipation of possible tariffs, thereby constraining supply in other regions. Goldman Sachs has adjusted its first-half 2026 copper price forecast upward, attributing this revision to a scarcity premium, even as the International Copper Study Group indicates a refined copper surplus for 2025.

From a technical perspective, the market is experiencing long liquidation, evidenced by a 11.46% decrease in open interest coupled with a price decline of Rs 16.85. Copper exhibits support at Rs 1272.2; a breach of this level would reveal Rs 1258.6. Conversely, resistance is identified at Rs 1302.4, followed by Rs 1319 in the event of a sustained recovery.