Copper prices fell by 0.47%, closing at Rs 1,302.35, influenced by widespread selling in industrial metals amid rising tensions between the United States and Iran, which dampened investor appetite for risk assets. Market sentiment experienced pressure from disappointing economic data out of China, although supply disruptions in Chile mitigated the extent of the decline. China’s economy exhibited further signs of deceleration, as GDP growth declined to a 3.5-year low, indicative of subdued domestic demand.

The softer outlook was underscored by a 7% year-on-year decline in China’s cumulative copper imports from January to May, even as refined copper production rose by 2.2% to 1.26 million tonnes in May. Meanwhile, global copper inventories remained elevated, with combined stocks across the LME, COMEX, and SHFE reaching 1.145 million tonnes, the highest level since January 2003. The deeper LME contango indicated comfortable near-term supply. Despite the pessimistic demand outlook, concerns on the supply side offered some support. A significant storm in Chile caused disruptions in mining operations due to extensive power outages.

Production at major mines experienced a significant decline, with Codelco’s output decreasing by 18.3%, Escondida’s by 17.6%, and Collahuasi’s by 19.3% in May. Additionally, copper inventories at the Shanghai Futures Exchange decreased by 20.3% over the week. Concurrently, the International Copper Study Group reported a refined copper deficit of 145,000 tonnes in April, indicating stronger consumption compared to production during that month.

From a technical perspective, copper experienced long liquidation, as evidenced by a 3.07% decline in open interest in conjunction with falling prices. Immediate support is positioned at Rs 1,294, succeeded by Rs 1,285.70. Resistance is identified at Rs 1,307.60, and a persistent advance beyond this threshold may propel prices towards Rs 1,312.90, albeit with near-term sentiment remaining cautious.