market overview
On Tuesday, copper closed 0.88% higher at Rs 1,405.35. The rally came as sentiment toward AI-related stocks improved and Chinese buyers showed more interest, even as a stronger US dollar capped gains.
Chinese demand
China's Yangshan copper import premium rose to a nearly 13-year high of $188 a tonne, indicating a healthy appetite for the imported metal. Similarly, the London Metal Exchange cash contract traded at a $199.50 per tonne premium over the next three months, indicating short-term tightness.
The Chinese economy expanded 4.5% year-on-year in the third quarter and industrial output rose 5.5% in September, supporting demand. Copper imports rose 20.7% MoM to 461,000 tonnes in September.
supply side pressure
Mining disruptions still persist in Chile and Peru. Chile's state miner Codelco reported an 8.9% annual increase in output in August to 101,700 tonnes. However, Escondida's production fell 27.6% to 76,100 tonnes and Colahuassie's production fell 25.1% to 26,500 tonnes. Peru's copper production fell 5% year-on-year in August.
analyst forecast
Goldman Sachs raised its end-2026 copper price target to $14,700 a tonne and its 2027 average outlook to $15,400, pointing to weak mine supply and tight markets outside the United States.
Meanwhile, the International Copper Study Group recorded a refined copper surplus of 132,000 tonnes in August, slightly up from a deficit of 45,000 tonnes in July. The group expects the global surplus to increase from 104,000 tonnes in 2026 to 368,000 tonnes in 2027 as production exceeds consumption.
Driven by electrification, renewable energy projects, digitalization and data-center construction, refined copper use is projected to grow 1.5% in 2026 and 2.5% in 2027.
technical snapshot
Open interest jumped 20.84% to 6,749 contracts, while the price rose by Rs 12.3. The next support levels are Rs 1,395.50 and Rs 1,386.00. Resistance starts at Rs 1,410.50; A strong break above could push the price to Rs 1,416.00, while a fall below Rs 1,395.50 could send it back to Rs 1,386.00.
Conclusion for copper traders and investors
- Short-term price momentum looks bullish as AI-stock sentiment improves and Chinese demand remains strong.
- Supply constraints in Chile and Peru keep the market tight, adding to the upside pressure.
- Analysts estimate that if buying remains strong, copper may touch the level of Rs 1,416.00.
- Keep an eye on the US Dollar and any new supply news for a potential reversal.