Copper prices experienced significant downward pressure, declining by 2% to close at Rs 1153, influenced by increasing inventories and overarching macroeconomic concerns that dampened market sentiment. Stocks in LME warehouses increased to 334,100 tons, marking the highest level since August 2019, indicative of a robust near-term supply situation. The widening discount between the cash contract and the three-month contract was further emphasized, reaching $113.5 per ton—its steepest in over a year.

The broader market sentiment exhibited a cautious stance, influenced by escalating tensions in the Middle East that have propelled energy prices upward and heightened inflation concerns. An improved inflation outlook has diminished expectations for imminent rate cuts, thereby exerting pressure on industrial metals. Meanwhile, China’s inflation has risen to a multi-year high after the Lunar New Year, while copper imports have decreased by 16.1% year-on-year, suggesting a decline in demand. Nonetheless, stronger-than-anticipated manufacturing figures from China contributed to mitigating the decline.

On the global front, the refined copper market exhibited a surplus, recording an excess of 173,000 tons in December and a total surplus of 380,000 tons for the year. Notwithstanding this, significant institutions maintain an optimistic stance on the long-term perspective, referencing increasing demand and a projected supply shortfall in the forthcoming years.

From a technical perspective, the market is experiencing long liquidation, as evidenced by a 5.92% decline in open interest to 13,693, alongside a price decrease of Rs 23.5. Immediate support is identified at Rs 1139.4, with potential further decline towards Rs 1125.6. Resistance is positioned at Rs 1170.6, and a breakout above this threshold may propel prices toward Rs 1188.