Copper yesterday settled lower by 0.3% at Rs 1,304.25 as profit booking emerged following recent gains attributed to easing geopolitical tensions, a weaker U.S. dollar, and improving demand indicators from China. Market sentiment continued to be bolstered following indications from U.S. President Donald Trump regarding the potential for a swift resolution to the U.S.-Iran conflict, alongside reports that Tehran was assessing a U.S. peace proposal.

The fundamentals of Chinese demand continued to provide support, as copper inventories in Shanghai Futures Exchange warehouses experienced a significant decline to 192,025 tons from mid-March levels. Additionally, the Yangshan copper premium increased by over 60% since early March, indicating a robust appetite for imports. Supply-side concerns have bolstered the medium-term outlook, as Chile, the leading copper producer globally, encounters risks stemming from disruptions in sulphur flows associated with the conflict in the Middle East. China’s restrictions on sulphuric acid exports could affect approximately 50% of Chile’s refining capacity.

Furthermore, the ongoing expansion of global datacenter construction and electrification initiatives is reinforcing expectations for sustained demand for copper in the long term. In February, the International Copper Study Group indicated a notable global surplus of refined copper, amounting to 276,000 metric tons, a substantial increase from the 34,000 tons recorded in January. The group anticipates that the global copper market will transition into a surplus of 96,000 metric tons in 2026 and 377,000 metric tons in 2027, driven by a deceleration in demand growth and an increase in secondary production.

In March, China experienced a 10.9% decrease in unwrought copper imports, while refined copper production saw an increase of 8.7% compared to the previous year. From a technical perspective, the market is experiencing new selling pressure, evidenced by a 2.01% rise in open interest to 12,165 contracts, alongside a price decrease of Rs 3.95. Copper exhibits immediate support levels at Rs 1,299.2 and Rs 1,294.2, with resistance identified at Rs 1,312.1 and Rs 1,320.