DBT Bureau
Pune, 6 Jan 2026
Copper prices ended higher, settling up by 2.04% at ₹1313.3, as supply-side concerns outweighed mixed macro signals. Sentiment was supported by disruptions at key producing regions, particularly Chile, where Capstone Copper announced that operations at its Mantoverde mine would be cut to nearly 30% capacity following strike action by Union #2, which represents around half of the site’s workforce. Adding to supply tightness, Chile’s copper output fell 7.18% year-on-year in November, while production at Freeport-McMoRan’s Grasberg mine in Indonesia remains halted after a fatal incident, impacting nearly 3% of global supply. Low inventories in LME-approved warehouses and elevated Yangshan premiums earlier in the month also reinforced near-term supply concerns. On the demand side, China’s factory activity unexpectedly expanded in December, snapping an eight-month contraction streak, supported by pre-holiday orders and policy measures to stabilise growth. However, upside remained capped as US Manufacturing PMI eased to 51.8 in December, marking the weakest expansion in the current growth phase. China’s copper imports declined for a second straight month in November, reflecting price sensitivity, although concentrate imports remained strong. Technically, the market is under fresh buying, with open interest rising 0.27% to 14,263 alongside a 26.2 price gain. Copper has support at ₹1297.6; below this, prices may test ₹1281.9. Resistance is seen at ₹1324.5, and a sustained move above could open the way toward ₹1335.7.
Market analysis:
- Copper trading range for the day is ₹1281.9- ₹1335.7.
- Copper rose on supply worries after a Chilean mine strike, deficit forecasts, and low LME stocks.
- Supply concerns continued to intensify following the strike going into 2026, after mine disruptions.
- US Manufacturing PMI was confirmed at 51.8 in December 2025, down from 52.2 in November.
Aluminium prices settled higher by 1.21% at ₹306.4, supported by a tightening supply outlook and expectations of sustained long-term demand growth. Sentiment was underpinned by China’s continued enforcement of a 45-million-ton cap on smelting capacity, aimed at preventing overcapacity and curbing deflationary pressures in the manufacturing sector. With capped output prioritised for domestic consumption, Chinese aluminium exports fell sharply by 9.2% year-on-year in November, lending support to global prices. Additionally, Chinese smelters’ plans to expand capacity in Indonesia have faced setbacks due to higher energy costs and regulatory risks, reinforcing supply-side constraints. On the inventory front, aluminium stocks in Shanghai Futures Exchange-monitored warehouses edged up 1.0% from December 26, tempering near-term bullishness. Globally, primary aluminium output rose marginally by 0.5% year-on-year to 6.086 million tonnes in November, according to the International Aluminium Institute. In contrast, inventories at three major Japanese ports declined 5.2% month-on-month to 312,100 tonnes, signalling tighter regional availability. China’s aluminium imports fell 14% year-on-year in November, even as cumulative imports for the first eleven months of 2025 remained 4.4% higher. Technically, the market is witnessing short covering, with open interest dropping 4.73% to 3,969 while prices gained 3.65. Aluminium has support at ₹303.8, with further downside opening toward ₹301.3. On the upside, resistance is seen at ₹308.2, and a break above could push prices toward ₹310.1.
Market analysis:
- Aluminium trading range for the day is ₹301.3-₹310.1.
- Aluminium prices rose tracking LME prices touched $3,000 a ton for the first time in more than three years.
- Prices gained due to a tightening supply outlook and bets on long-term demand.
- Prices gained support from a cap on Chinese smelting capacity of 45 million tons, which is expected to tighten supply as demand climbs.
Source: Kedia Stocks & Commodities Research Pvt. Ltd.
(Disclaimer: This information is for educational purposes only. Please consult your financial advisor before taking positions in stocks)
