Copper prices experienced a notable increase yesterday, closing up by 3.33% at Rs 1369.05. This rise was bolstered by escalating supply concerns after Freeport disclosed a delay in the complete restoration of its Grasberg mine operations in Indonesia. Additional support emerged from inflation data out of China that exceeded expectations, with consumer prices increasing by 1.2% year-on-year in April, surpassing the anticipated 0.9%. Concurrently, producer prices experienced a rise of 2.8%, representing the most significant increase in nearly 45 months.

The data enhanced overall sentiment regarding industrial metals; however, traders observed that the increase in factory-gate prices was primarily influenced by escalating energy and raw material costs, rather than a robust rebound in domestic demand. Supply-side concerns persisted in the market as ongoing tensions in the Middle East hindered shipments of sulphuric acid, an essential element in the copper refining process. China’s decision to impose a ban on sulphuric acid exports from May through December has significantly constrained the supply outlook. Chile’s copper production has experienced a decline of nearly 6% in the first quarter of 2026, exacerbating the pressures on global supply conditions.

Simultaneously, inventories at the Shanghai Futures Exchange decreased by 5.6%, suggesting a reduction in physical availability. The International Copper Study Group maintains its forecast for the global copper market to transition into a surplus of 96,000 metric tons by 2026, driven by a deceleration in demand growth and an increase in secondary supply, despite ongoing geopolitical risks that contribute to uncertainty. Citi anticipates that copper prices will stay buoyed above $13,000 per ton, with physical buying expected to mitigate potential downside risks.

From a technical perspective, the market is experiencing short covering, evidenced by a 4.67% decrease in open interest, which now stands at 10,495, alongside a significant price increase of Rs 44.1. Copper is currently finding support at Rs 1340.9, with additional support at Rs 1312.6. Resistance levels are identified at Rs 1386.2, followed by Rs 1403.2.