Copper settled marginally lower by 0.03% at Rs 1,371.7, as increasing LME inventories alleviated supply concerns, counterbalancing the support derived from a significant decline in the dollar. LME copper stocks rose by an additional 12,425 tonnes, reaching a total of 235,975 tonnes. This marks an 11% increase from the previous week; however, it remains 40% lower than the levels recorded three months prior. Increasing inventories have alleviated worries regarding tight supply stemming from prior shipments to US warehouses in anticipation of possible tariffs on refined copper.

Nonetheless, supply disruptions persist in offering foundational support. Lundin Mining has adjusted its 2026 Caserones copper production guidance to a range of 120,000-130,000 tonnes, down from the previous estimate of 130,000-140,000 tonnes, following significant operational disruptions caused by a severe winter storm in Chile. Antofagasta has revised its 2026 production forecast down to 625,000-655,000 tonnes from 650,000-700,000 tonnes due to a shutdown at Los Pelambres caused by heavy rainfall. Goldman Sachs significantly increased its projection for the 2026 refined copper deficit outside the US, adjusting it from 60,000 tonnes to 640,000 tonnes.

However, the International Copper Study Group reported an 18,000-tonne refined copper surplus in May following a 145,000-tonne deficit in April, with the market surplus from January to May totalling 221,000 tonnes.  In July, Chinese refined copper production saw a year-on-year increase of 1.3%, reaching 1.29 million tonnes. Conversely, imports of unwrought copper and copper products experienced a decline of 11.5%, totalling 425,000 tonnes. Imports from January to July dropped 6.2% to 2.92 million tonnes, signalling weaker demand. In July, China experienced a year-on-year decline of 7.1% in its imports of copper ore and concentrate. Meanwhile, COMEX copper stocks reached a record 670,273 tonnes, reinforcing the availability of supply in the near term.

Rising exchange inventories and weaker Chinese imports signal bearish trends, while mine disruptions and anticipated future deficits offer medium-term support. Technically, copper is experiencing long liquidation, evidenced by a 2.83% decline in open interest to 8,101 contracts, alongside a price decrease of Rs 0.4. Support is positioned at Rs 1,364.8, with an additional level at Rs 1,358, whereas resistance is identified at Rs 1,377.7. A sustained move above Rs 1,377.7 could lead to a test of Rs 1,383.8.