Copper prices closed 0.78% higher at Rs 1,335.35, buoyed by a shift in risk sentiment following growing optimism about a possible peace agreement between the United States and Iran. Easing geopolitical tensions contributed to alleviating worries regarding global economic growth and the demand for industrial metals. Additional support emerged from persistent speculation regarding potential U.S. tariffs on refined copper imports, which has stimulated metal flows into the United States and constrained supply availability in other regions.
However, gains were moderated by stronger-than-anticipated U.S. inflation data, which bolstered expectations of a more stringent monetary policy and heightened concerns regarding future growth in industrial demand. Fundamental sentiment continues to be positive, driven by ongoing long-term supply challenges. Jefferies anticipates that copper markets will experience a significant supply deficit until 2030, as leading producers grapple with ongoing operational challenges. Concerns regarding the deceleration of production growth at significant mines, such as Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of Congo, persist in bolstering prices.
China’s central bank has also promoted heightened bank lending, bolstering anticipations of enhanced economic activity and industrial demand. Additionally, China’s unwrought copper imports experienced a year-on-year increase of 3.2% in April, reaching a seven-month high of 452,000 metric tonnes. This rise was primarily fuelled by robust investment in power infrastructure, which saw a significant 37% increase in spending during the first quarter of 2026. Despite supportive demand trends, the International Copper Study Group reported a refined copper surplus of 30,000 metric tonnes in March and projects a surplus of 96,000 metric tonnes in 2026 due to slower demand growth and increased secondary production. Nevertheless, major investment banks maintain a positive outlook. Goldman Sachs has adjusted its end-2026 copper forecast to $13,735 per metric tonne.
Meanwhile, Citi has revised its near-term forecast to $14,500 per tonne, attributing these changes to tightening supply conditions and uncertainties related to tariffs. Technically, the market is experiencing new buying activity, as indicated by a 1.59% increase in open interest alongside rising prices. Copper has immediate support at Rs 1,328.3, followed by Rs 1,321.2. Resistance is identified at Rs 1,341.7, and a breakout above this threshold may lead to further gains towards Rs 1,348.0.