Copper Prices Drop on Profit Booking Amid Rate Hike Expectations

Copper prices settled marginally lower by 0.22% at ₹1,391.35 as profit booking emerged after Federal Reserve Chair Kevin Warsh adopted a more hawkish tone, strengthening expectations of a possible rate hike next month and weighing on risk-sensitive industrial metals.

However, the downside remained limited due to concerns over near-term copper availability, with tightening exchange inventories raising fears about metal scarcity. LME-registered warehouse stocks declined sharply to 107,050 tonnes from 166,775 tonnes a week earlier, while copper inventories in SHFE-monitored warehouses fell 19.1% to 72,428 tonnes.

Lower crude oil prices, as US-Iran tensions shifted from military confrontation toward economic pressure, improved broader economic sentiment and provided some support to growth-sensitive metals. China's general public budget expenditure increased 1.3% year-on-year to CNY 16.29 trillion during the first seven months of 2026, with central government spending rising 6.2% to CNY 2.48 trillion.

The global refined copper market moved into a 60,000-tonne deficit in June from a 15,000-tonne surplus in May, although the first six months still recorded a 131,000-tonne surplus. China's unwrought copper and copper product imports fell 11.5% year-on-year to 425,000 tonnes in July, while January-July imports declined 6.2% to 2.92 million tonnes.

Technically, the market remains under long liquidation, with open interest declining 2.85% to 11,556 while prices fell ₹3, indicating profit booking rather than aggressive fresh short formation. Copper has support at ₹1,386.4, and a sustained break below this level could test ₹1,381.3.