Copper prices increased by 0.20% to close at Rs 1,287.4, buoyed by constricting global supply dynamics and ongoing reductions in inventory levels at key metal exchanges. However, gains remained constrained as investors exhibited caution regarding the uncertainty surrounding U.S. monetary policy and the potential imposition of import tariffs on refined copper. Market participants remained vigilant regarding potential U.S. tariffs, as expectations of elevated interest rates later this year constrained upward momentum amid worries about a slowdown in industrial demand.

Supply fundamentals continued to exhibit strength, evidenced by a 9.6% decrease in copper inventories at the Shanghai Futures Exchange over the week, alongside a persistent decline in stocks held in LME warehouses. Chile, recognised as the leading producer of copper globally, experienced a 12.9% decrease in copper production in May compared to the same month last year, totalling 423,623 metric tonnes. In contrast, China’s refined copper production rose by 2.2% to 1.26 million metric tonnes, indicative of robust domestic smelting operations. The International Copper Study Group reported a global refined copper deficit of 145,000 metric tonnes in April, compared with a surplus in March, highlighting stronger consumption than production.

China recorded a seven-month high in unwrought copper imports during April, bolstered by strong investment in power grid infrastructure. Major financial institutions, including Goldman Sachs and Citi, have elevated their long-term projections for copper prices. This adjustment is attributed to ongoing supply constraints from mines, anticipated global deficits, and demand that has exceeded expectations. Supply disruptions at major mines such as Grasberg and Kamoa-Kakula are anticipated to maintain a tight market in the forthcoming years.

Technically, copper is experiencing short covering, as evidenced by a 0.93% decline in open interest alongside an increase in prices. Immediate support is identified at Rs 1,281.7, with subsequent support at Rs 1,275.9, while resistance is established at Rs 1,291.6. A sustained move above this level could extend gains toward Rs 1,295.7.