Copper prices concluded the session with a 0.40% increase, reaching Rs 1,266.65. This uptick was bolstered by a reduction in exchange inventories and a more favourable medium-term supply outlook, although the extent of the gains was limited by a reduction in geopolitical tensions. LME copper stocks declined to 339,100 metric tonnes, marking their lowest level since mid-March. Meanwhile, inventories on the Shanghai Futures Exchange decreased by 5.7% from the previous week to 135,732 metric tonnes, the lowest since December. However, the cash LME contract continued to trade at a US$40 per tonne discount to the three-month contract, indicating that near-term physical supply remains sufficient.

Market sentiment shifted to a more cautious stance after the United States issued a 60-day sanctions waiver to Iran in light of initial peace negotiations, alleviating immediate worries regarding potential global supply disruptions. Fundamentally, the copper market continues to exhibit a mixed outlook. In May, China’s refined copper production saw a year-on-year increase of 2.2%, reaching 1.26 million metric tonnes. Concurrently, unwrought copper imports experienced a rise of 3.2%, marking a seven-month high, bolstered by strong investment in power grid infrastructure.

The International Copper Study Group reported a global refined copper deficit of 145,000 metric tonnes in April, contrasting with a surplus in March. Nonetheless, the market maintained a cumulative surplus during the initial four months of the year. Long-term market sentiment remains positive, with Jefferies projecting an average annual supply deficit through 2030. Meanwhile, Goldman Sachs and Citi have both increased their copper price forecasts, attributing this to slower mine supply growth, robust global demand, and ongoing structural supply shortages, even in the face of higher visible inventories.

From a technical perspective, the market is experiencing new buying activity, as evidenced by a 4.59% increase in open interest alongside rising prices, suggesting the establishment of new long positions. Copper exhibits immediate support at Rs 1,263.4, with subsequent support at Rs 1,260.2, while resistance is identified at Rs 1,270.4. A sustained move above this level could extend gains toward Rs 1,274.2, maintaining a constructive near-term technical outlook.