Kedia Advisory - Copper prices edged higher by 0.3% to settle at 862.25, supported by a weaker U.S. dollar following soft U.S. inflation data and weaker-than-expected retail sales. The subdued economic indicators raised concerns about slowing consumer activity, indirectly aiding industrial metals like copper by tempering expectations of aggressive rate hikes by the Federal Reserve. However, gains were capped by bearish supply-demand fundamentals, as the International Copper Study Group (ICSG) doubled its 2025 global copper surplus forecast to nearly 300,000 tonnes due to rising production and downgraded demand growth amid global economic uncertainties and trade policy risks.
On the supply side, the global refined copper market registered a 61,000 metric ton surplus in February, narrowing from January’s 90,000-ton surplus. However, when adjusted for bonded warehouse inventory shifts in China, the surplus stood at 76,000 tons in February. Meanwhile, China’s imports of unwrought copper and related products in April remained unchanged year-on-year at 438,000 tons, with total imports for the first four months of 2025 falling by 3.9% to 1.74 million tons. Notably, Shanghai Futures Exchange inventories plummeted 60% in April to 89,307 tons, marking the steepest monthly drop on record, signaling strong domestic drawdown.
Technically, the copper market is under short covering, with open interest falling 16.71% to 3,919. Support is now seen at 854.8, with a break below likely to test 847.3. Resistance is at 866.4, and a breakout above may push prices toward 870.5.