Copper settled 0.09% lower at Rs 1,384.15 as a significant increase in exchange inventories alleviated worries regarding immediate supply constraints, while the growing availability exerted downward pressure on prices. LME-monitored inventories were recorded at 238,575 tonnes on August 20, reflecting an increase of approximately 16% from the lows observed in February. In contrast, SHFE stocks experienced a significant rise of 28.4% last week, reaching a total of 89,548 tonnes. Comex copper inventories held steady at a historic level of 742,778 short tonnes, equivalent to 673,836 metric tonnes.

The LME cash premium over three-month copper has contracted further to approximately $53 per tonne, down from $61.32 previously and significantly lower than the $545 observed a week earlier, indicating enhanced immediate availability. However, LME warehouse stocks have experienced a decline for 42 consecutive sessions, marking the longest such streak since 2014, with nearly half of the remaining stocks already designated for withdrawal. In July, U.S. refined copper imports surpassed 200,000 tonnes, marking the highest monthly volume in over a decade. This surge has resulted in combined U.S. inventories across Comex, LME, and private storage exceeding 1 million tonnes. The global refined copper market experienced a deficit of 60,000 tonnes in June, a stark contrast to the 15,000-tonne surplus recorded in May.

However, the surplus for the first half of the year was 131,000 tonnes, compared to 114,000 tonnes during the same period last year, as reported by ICSG. In June, global refined copper production amounted to 2.37 million tonnes, while consumption was recorded at 2.43 million tonnes. In July, China’s refined copper imports experienced a year-on-year decline of 11.5%, totalling 425,000 tonnes. For the period from January to July, imports decreased by 6.2%, amounting to 2.92 million tonnes. In July, Chinese refined copper production experienced a year-on-year increase of 1.3%, reaching a total of 1.29 million tonnes.

UBS anticipates that the copper market deficit will expand to 379,000 tonnes in 2027, up from 219,000 tonnes in 2026, and upholds a positive outlook with a target of $15,500 per tonne. Technically, the market is experiencing long liquidation, evidenced by a 20.1% decline in open interest to 5,874, alongside a price decrease of Rs 1.2. Copper exhibits support at Rs 1,376.5, with an additional level at Rs 1,368.9. Resistance is identified at Rs 1,392.2; a persistent advance beyond this threshold may propel prices toward Rs 1,400.3.