DBT Bureau
Pune, 12 Jan 2026
Copper prices edged higher, settling up 0.87% at ₹1,281.3, supported by concerns over tightening supply and expectations of structurally stronger demand linked to the AI boom and the global energy transition. Near-term supply tightness was reflected in the LME market, where the cash-to-three-month copper premium widened to $55, a five-week high. Sentiment also drew support from fresh stimulus measures announced by China, including funding for consumer trade-in programs and large-scale infrastructure investments, which improved the broader demand outlook. At the same time, elevated prices have begun to curb physical demand in China. Shanghai copper inventories climbed to an eight-year high for this period, while Chinese smelters exported excess metal at discounts as importers pushed back against high international premiums. On the supply side, disruptions persisted, with Chilean copper output falling 7.18% year-on-year in November and halted operations at Indonesia’s Grasberg mine adding to supply risks. Major banks remain constructive but cautious, with Goldman Sachs lifting its first-half 2026 forecast while warning that prices above $13,000 per ton may not be sustainable. From a technical perspective, the market is witnessing short covering, with open interest marginally lower by 0.13% at 14,449 contracts alongside a ₹11.1 price gain. Copper has support at ₹1,266.9; a break below could test ₹1,252.3. Resistance is seen at ₹1,295.3, and a move above this level could open the way toward ₹1,309.1.
Market analysis:
- Copper trading range for the day is ₹1252.3- ₹1309.1.
- Copper gains due to concerns about tightened supply and bets on future surging demand from the AI boom.
- The premium of LME cash against the three-month copper contract widened to $55, its five-week high.
- Record copper prices, with LME copper climbing above $13,000 per ton, have sharply dampened physical demand in China
Aluminium prices recorded a strong advance, settling higher by 2.77% at ₹317.4, as investors reassessed expectations of tightening supply against a backdrop of resilient global demand. Sentiment was supported by improving confidence in China’s macro outlook after the central bank reiterated its commitment to an accommodative policy stance, including reserve requirement and interest rate cuts in 2026, alongside measures to boost domestic demand and stabilize growth. Policy signals aimed at preventing overcapacity in metal production further underpinned prices, with China expected to breach its 45-million-ton output cap, limiting scope for smelter expansion next year. Supply-side constraints remained prominent. Chinese smelters, constrained by output caps, diverted more material to the domestic market, contributing to a 9.2% year-on-year drop in exports in November. Globally, high energy costs, equipment issues, bauxite sourcing challenges, and geopolitical risks disrupted operations in countries including Iceland, Mozambique, and Australia. While SHFE aluminium inventories rose 10.8% from late December, stocks at major Japanese ports declined 5.2%, indicating tighter availability in some consuming regions. From a technical perspective, the market is witnessing short covering, with open interest falling 0.93% to 3,300 contracts while prices rose by ₹8.55. Aluminium is finding support near ₹312; a break below could test ₹306.5. On the upside, resistance is seen at ₹320.5, with a move above potentially extending gains toward ₹323.5.
Market analysis:
- Aluminium trading range for the day is ₹306.5- ₹323.5.
- Aluminium gains as investors reassessed expectations around tightening supply and robust global demand.
- Support also seen as investor optimism reflects early signs of economic stabilization after Beijing’s support for key sectors.
- China’s central bank said it will cut the reserve requirement ratio and interest rates in 2026 to keep liquidity ample.
(Disclaimer: The information is for educational purposes only. Please consult your financial advisor before investing in stocks)
