Copper Dips on Stronger Dollar and Thin Trading Volumes

Copper prices ended slightly lower at ₹1,399.6, pressured by a stronger US dollar and thin trading volumes amid a public holiday in China, the top consumer of the metal. The dollar hit a three-month high, while a global bond selloff pushed borrowing costs to multi-decade highs, dampening risk sentiment and industrial metals. However, improving Chinese manufacturing activity offered some support, with the official PMI rising to 50.1 in September from 49.8 in August, and the private RatingDog PMI climbing to a five-month high of 52.1.

Pre-holiday demand in China continued to draw down copper inventories in Shanghai Futures Exchange warehouses, with stocks falling 17.8% week-on-week to 38,744 tonnes, the lowest since January 2024. China’s physical copper premium eased to 1,050 yuan per tonne, while the Yangshan import premium increased slightly to $119 per tonne. Supply concerns persisted as Chilean copper output declined 12.8% year-on-year in August to 369,500 tonnes due to storm-related disruptions and lower ore grades. Supervisors at Chile’s Escondida mine also rejected a collective contract offer, increasing the possibility of strike-related supply disruptions.

The global refined copper market recorded a 51,000-tonne deficit in July, narrowing from 74,000 tonnes in June, although the first seven months showed a 32,000-tonne surplus versus 157,000 tonnes a year earlier. July refined output stood at 2.41 million tonnes against consumption of 2.46 million tonnes. China’s unwrought copper imports fell to 382,000 tonnes in August, with January-August imports declining 6.7% year-on-year.

Technically, the market is under long liquidation, with open interest declining 5.66% to 8,319 while prices fell ₹2.05. Copper is finding support near ₹1,390.4, and a break below this level could expose ₹1,381.2. Resistance is placed near ₹1,408.3, while a sustained move above this level could push prices toward ₹1,417.