Copper settled marginally lower by 0.22% at Rs 1,391.35 as profit booking emerged following Federal Reserve Chair Kevin Warsh’s more hawkish tone, which bolstered expectations of a potential rate hike next month and exerted pressure on risk-sensitive industrial metals. However, the downside remained constrained as the tightening of exchange inventories heightened concerns regarding the near-term availability of copper. LME-registered warehouse stocks experienced a significant decrease, dropping to 107,050 tonnes from 166,775 tonnes the previous week.

Concurrently, copper inventories in SHFE-monitored warehouses saw a decline of 19.1%, reaching 72,428 tonnes. Ongoing cancellations of LME warrants have mitigated a significant portion of the stock increase observed last week. Concurrently, the movement of metals toward US warehouses, in anticipation of possible tariffs on refined copper, has further constrained the supplies available on the exchange. Lower crude oil prices, as US-Iran tensions transitioned from military confrontation to economic pressure, enhanced broader economic sentiment and offered some support to growth-sensitive metals. China’s general public budget expenditure rose by 1.3% year-on-year, reaching CNY 16.29 trillion in the first seven months of 2026.

Central government spending saw a more pronounced increase of 6.2%, amounting to CNY 2.48 trillion, underscoring ongoing fiscal support. The global refined copper market transitioned into a 60,000-tonne deficit in June, shifting from a 15,000-tonne surplus in May. Nevertheless, the first half of the year maintained a cumulative surplus of 131,000 tonnes. In June, refined copper production reached 2.37 million tonnes, while consumption was recorded at 2.43 million tonnes. Meanwhile, China’s imports of unwrought copper and copper products decreased by 11.5% year-on-year to 425,000 tonnes in July, while the total for January to July saw a decline of 6.2%, amounting to 2.92 million tonnes.

Copper ore and concentrate imports decreased by 7.1% in July, whereas refined copper production saw a rise of 1.3%, reaching 1.29 million tonnes. Technically, the market continues to experience long liquidation, as evidenced by a 2.85% decline in open interest to 11,556, accompanied by a Rs 3 drop in prices. This suggests a trend of profit booking rather than the establishment of new aggressive short positions. Copper has support at Rs 1,386.4, and a sustained break below this level could test Rs 1,381.3. On the upside, resistance is positioned at Rs 1,398.2, and a decisive move above this threshold could propel prices toward Rs 1,404.9.