Copper Prices Climb on Supply Concerns and Easing Fed Hike Bets

Copper prices in India rose 0.78% to settle at ₹1,410.5, supported by easing expectations of a Federal Reserve rate hike despite pressure from a stronger dollar. Supply concerns added to the bullish sentiment, with Chilean copper production dropping 12.8% year-on-year in August to 369,500 tonnes, its lowest level since February 2011. Workers at Chile’s Centinela mine voted to strike, and supervisors at Escondida rejected a collective contract offer, increasing the risk of further supply disruptions.

China’s manufacturing activity showed signs of improvement in September, with the official PMI rising to 50.1 from 49.8 and the private RatingDog PMI reaching a five-month high of 52.1. Copper stocks on the Shanghai Futures Exchange fell 17.8% week-on-week to 38,744 tonnes, the lowest since January 2024, reflecting strong pre-holiday demand. The Yangshan import premium rose to $119 per tonne, though China’s domestic physical premium eased to 1,050 yuan.

Bank of America increased its 2031 copper price forecast by 20% to $13,577 per tonne, citing constrained supply outside the United States and persistent tightness in China. The global refined copper market posted a 51,000-tonne deficit in July, though the January-July period remained in a 32,000-tonne surplus. China’s unwrought copper imports declined to 382,000 tonnes in August from 425,000 tonnes in July, with January-August imports falling 6.7% year-on-year to 3.30 million tonnes.

Speculators reduced net long positions by 3,940 contracts to 78,709. Technically, copper saw short covering as open interest declined 0.32% to 8,292 while prices gained ₹10.9. The market found support at ₹1,402.6, with resistance at ₹1,415.1. A break below support could expose ₹1,394.8, while a move above resistance might push prices toward ₹1,419.8.