Copper Prices Dip on Profit Booking, Tight Supply Concerns Persist

Copper prices have been under pressure due to profit booking after a recent rally. The metal has settled at Rs 1,375.2, down 0.29% from its previous level. However, concerns over tight London Metal Exchange (LME) inventories and supply disruptions continue to provide underlying support.

A temporary shutdown of a smelter in Indonesia has added to supply concerns, while the LME cash copper premium over the benchmark surged to $196 per tonne, its highest since October. This indicates tight nearby supply amid metal outflows toward the United States.

Goldman Sachs has sharply raised its 2026 refined copper deficit forecast outside the US to 640,000 tonnes from 60,000 tonnes, highlighting increasing structural supply risks. Chilean production showed mixed trends in June, with Escondida output rising 45.8% year-on-year and Collahuasi production increasing 1.7%, while Codelco output declined 4.8%.

Speculative net long positions increased by 11,307 contracts to 77,796 contracts in the week ending August 4, indicating stronger bullish positioning. China's manufacturing activity slowed to a four-month low in July, and the country's unwrought copper imports declined 11.5% year-on-year to 425,000 tonnes.