Copper prices decreased by 0.27%, closing at Rs 1,336.7, as profit-taking occurred following recent increases attributed to tightening global supplies and robust demand from China. Despite the minor correction, broader market sentiment remained bolstered by declining exchange inventories and improving physical demand in China. Traders exhibited a degree of caution as they awaited further clarity regarding potential U.S. tariffs on refined copper imports, a development that could significantly impact global trade flows and pricing.

Fundamentally, supply conditions continue to tighten, as evidenced by the steady decline in copper inventories within LME-registered warehouses and those of the Shanghai Futures Exchange since May. SHFE stocks declined to 79,909 tonnes, marking the lowest point since August of the previous year and representing a decrease of over 80% from mid-March levels, with weekly inventories experiencing an additional drop of 20.3%. The Yangshan copper premium climbed to $109 per tonne, the highest level since December 2023, reflecting robust Chinese import demand.

China’s refined copper imports hit a nine-month peak of 281,307 tonnes in June, driven by diminished domestic supply that bolstered foreign acquisitions. Meanwhile, Chile has increased its forecast for the average copper price in 2026 to $5.90 per pound, attributing this adjustment to favourable market conditions. However, it is noteworthy that production at major mines such as Codelco, Escondida, and Collahuasi has experienced a significant decline. The International Copper Study Group reported an 18,000-tonne refined copper surplus in May following a deficit in April.

Meanwhile, China’s government reaffirmed its dedication to meeting annual growth targets and indicated further policy support aimed at bolstering domestic demand. Technically, copper experienced long liquidation, as evidenced by a 10.84% decrease in open interest alongside a decline in prices. Immediate support is positioned at Rs 1,331.5, succeeded by Rs 1,326.1, whereas resistance is identified at Rs 1,344.4. A sustained move above this level could extend gains towards Rs 1,351.9.