Copper prices declined by 0.88% to close at Rs 1,218.95, as initial support from robust Chinese macroeconomic data was counterbalanced by a stronger U.S. dollar. In January 2026, China’s manufacturing PMI increased to 50.3, marking the most rapid expansion in three months. This growth was propelled by heightened output, an uptick in new orders, and enhanced hiring, providing an encouraging indication for the demand for industrial metals.

However, upside momentum was constrained following U.S. President Donald Trump’s appointment of Kevin Warsh as the next Federal Reserve chair, which bolstered the dollar and exerted downward pressure on base metal prices. The fundamentals present a mixed picture. Global inventories have increased significantly, with COMEX copper stocks surpassing 500,000 tons for the first time and LME inventories reaching their highest level since May 2025, resulting in total visible stocks exceeding 900,000 tons.

Concurrently, on-warrant LME inventories decreased to a six-month low as metal persisted in flowing into U.S. warehouses, driven by tariff-related arbitrage opportunities. Supply trends exhibited variability, as Zambia experienced an 8% increase in output, whereas Peru saw a year-on-year decline exceeding 11% in production. The ICSG has indicated an expanding surplus in refined copper, underscoring immediate supply stability while acknowledging the ongoing structural demand driven by renewable energy, artificial intelligence, and electrification trends.

From a technical perspective, the market is experiencing long liquidation, evidenced by a 6.24% decrease in open interest coupled with a Rs 10.8 decline in price. Copper is currently supported at Rs 1,166.7; a breach of this level may result in a decline to Rs 1,114.5. Resistance is identified at Rs 1,260.4, and a breakthrough above this level could pave the way toward Rs 1,301.9.