Copper prices experienced a decline, closing down 1.33% at Rs 1,228, as increasing supply pressures negatively impacted market sentiment. The decline was primarily influenced by events in China, the globe’s foremost consumer, where refined copper production is anticipated to increase by approximately 5% this year following a significant 10% rise the previous year. In a further development, copper inventories have been on the rise in major trading centers.

Inventories in LME-registered warehouses increased to 155,725 tons, marking the highest level since March, as material was returned to warrant in Taiwan and South Korea. This indicates that some supplies initially destined for the US were redirected to other locations. Inventories at the Shanghai Futures Exchange recorded a weekly uptick. Despite short-term vulnerabilities, long-term price outlooks continue to be favorable.

Chile’s copper commission, Cochilco, has adjusted its average price forecast for this year to $4.95 per pound, attributing this revision to resilient demand, a softer dollar, and persistent geopolitical risks. The commission anticipates prices will average $5.00 per pound by 2027. Supply growth exhibits a mixed landscape, as Chile and Zambia report increased output, whereas Peru experiences a significant year-on-year decline. Meanwhile, the refined copper market continues to exhibit a surplus, as the ICSG indicates a broader surplus in November relative to the preceding month.

From a technical perspective, the market is experiencing new selling pressure, as evidenced by a 0.92% increase in open interest concurrent with a decrease in price. Copper is currently experiencing support around Rs 1,204.8, and a decline beneath this level may lead to a potential drop to Rs 1,181.4. On the upside, resistance is observed at Rs 1,256.8, with a movement above this level likely to challenge Rs 1,285.4.