Kedia Advisory - Copper prices closed marginally lower by 0.05% at ₹859.7, as traders weighed the short-term relief from the US-China trade truce against persistent concerns of global oversupply. The temporary agreement between Washington and Beijing to reduce tariffs to 30% and 10%, respectively, for a 90-day period helped ease trade tensions, but uncertainty about a longer-term resolution continues to cloud market sentiment. Meanwhile, the International Copper Study Group (ICSG) doubled its 2024 global surplus forecast to nearly 300,000 tonnes, underlining market fears of a supply glut due to robust ore production, especially from South America. On the demand side, China’s macroeconomic stimulus—including a 10 basis point interest rate cut and a 50 basis point reduction in banks’ reserve requirement ratio—offers a cushion to consumption prospects.
However, trade flows reflect shifting dynamics. China’s imports of unwrought copper and copper products in April remained flat at 438,000 metric tons year-on-year, while cumulative imports from January to April fell 3.9%. Much of this may be linked to traders redirecting shipments to the U.S. in anticipation of tariff changes, leading to a 61% surge in COMEX stocks since March-end, reaching their highest level since October 2018. Refined copper market data continues to show a surplus, albeit narrowing—from 90,000 metric tons in January to 61,000 tons in February.
Technically, copper remains under long liquidation as open interest fell 7% to 4,705. Immediate support is at ₹855.4, with further downside risk to ₹850.9. Resistance is seen at ₹864.7, and a breakout could lead to a test of ₹869.5.