Copper increased by 1.25% to close at Rs 1,222.35, driven by a positive shift in demand sentiment that overshadowed worries regarding escalating exchange inventories. Optimism regarding future consumption contributed to an increase in prices, despite stocks in Shanghai Futures Exchange warehouses rising to 391,529 tons—the highest level since March 2016—signifying the 11th consecutive weekly increase following the Lunar New Year holidays. The Yangshan premium increased to $50 per ton from $33 prior to the break, indicating a stronger import demand in China.

Inventory accumulations were not confined to China. LME stocks have increased to 253,600 tons, and Comex inventories have similarly continued to trend upward. Despite the short-term surplus, long-term projections continue to appear favorable. UBS anticipates that copper prices will ascend to $15,000 per ton over the next 13 months, attributing this forecast to an expanding global deficit.

Goldman Sachs identifies potential upside risk to its 2026 forecast, contingent upon strategic stockpiling leading to a reduction in commercial inventories. On the supply side, output disruptions continue to be a concern. Production experienced a downturn at Chile’s Collahuasi and Escondida mines, while Peru noted an 11.2% year-on-year decrease in output for November.

In the meantime, China’s refined copper production demonstrates robust growth, increasing by 9.1% in December. The market is currently experiencing short covering, as evidenced by a 1.92% decline in open interest, bringing it to 16,723 contracts. Support is identified at Rs 1,211.8, whereas resistance is positioned at Rs 1,230.5. A breach above may aim for Rs 1,238.6.