Copper prices settled 0.12% lower at Rs 1,322.8 as investors exhibited caution in anticipation of the US Federal Reserve’s policy decision. Additionally, indications of alleviating supply tightness in China contributed to the prevailing market sentiment. The Yangshan copper premium held firm at $112 per tonne, a slight decrease from the previous week’s $115, which marked the highest level since November 2022, suggesting a decline in import demand. Meanwhile, the US dollar remained close to one-month highs as markets continued to factor in the potential for an additional US interest rate increase, thereby constraining demand for industrial metals.

Supply developments exhibited a varied landscape across the principal producing regions. Available copper inventories on the London Metal Exchange rose to 101,975 tonnes following the return of fresh material to registered warehouses in Taiwan. However, equities continue to hover around multi-month lows after significant cancellations occurred earlier in July, maintaining a high cash premium over the three-month contract. In Chile, Antofagasta has recommenced operations at its Los Pelambres mine following temporary interruptions due to significant rainfall and power outages, while upholding its full-year production guidance. Chile has adjusted its average copper price forecast for 2026, increasing it to $5.90 per pound from the previous estimate of $5.46.

However, production remained weak, with Codelco output declining 18.3% year-on-year, while Escondida and Collahuasi reported production falls of 17.6% and 19.3%, respectively. China’s social copper inventories rose by 5,300 tonnes week-on-week to 117,200 tonnes, while refined copper imports hit a nine-month peak of 281,307 tonnes in June, bolstered by robust domestic demand and diminished local supply. Meanwhile, the International Copper Study Group reported a global refined copper surplus of 18,000 tonnes in May.

Technically, the market is experiencing new selling pressure, as open interest has increased by 3.41% to 11,382 contracts, accompanied by a price decline of Rs 1.55. Copper has immediate support at Rs 1,317.5, followed by Rs 1,312.2, while resistance is placed at Rs 1,327.3. A sustained move above this level could extend gains towards Rs 1,331.8.