DBT Bureau
Pune, 3 Sep 2026
Kedia Advisory Copper SWOT Report highlights a mixed outlook for copper, with supply disruptions, declining warehouse inventories and a refined-market deficit providing support to prices. However, stronger U.S. dollar conditions, potential Federal Reserve rate hikes, weak manufacturing activity and renewed geopolitical tensions are creating near-term pressure. The report also identifies widening supply deficits and potential Chinese fiscal support as key opportunities, while rising speculative positioning risks and bearish technical indicators remain important threats.
STRENGTHS
● Prices gained over 3.5% in Aug month after a string of withdrawal requests from London Metal Exchange warehouses raised availability concerns.
● Copper output in Chile, fell 9.4% year-on-year in July hit by severe storms that struck mining operation areas.
● Codelco’s copper production fell 11% to 564,000 metric tons, down from 634,000 tons a year earlier, mainly because of operational restrictions at El Teniente.
● Data showed total copper stocks in SHFE-monitored warehouses were down more than 19% last week.
● Global refined copper market showed a 60,000 metric tons deficit in June, compared with a 15,000 metric tons surplus in May – ICSG
WEAKNESSES
● Prices dropped around 3.3% from high of 1407.90 as conflict in ME escalated, stoking concerns that higher oil prices could fuel inflation.
● Pressure also seen amid the stronger dollar and rising bets that Fed will raise interest rates in September.
● China’s manufacturing activity contracted for the second consecutive month in August and U.S. factory activity slowed in August, weighed on demand expectations.
● China’s refined copper production in July rose 1.3% year-on-year to 1.29 million metric tons.
● MMG confirmed it had recommenced operations for its mine and process plant at its Las Bambas operations in Peru from August 21.
OPPORTUNITIES
● The LME cash-to-three-month copper spread remained in backwardation to $87.56 a ton, signaling tight availability.
● UBS sees copper market deficit to widen to 379,000 metric tons in 2027, from 219,000 metric tons in 2026.
● Uncertainty around potential U.S. tariffs on imports of refined copper has caused large outflows from LME warehouses.
● China pledging fiscal policy measures to strengthen economic growth amid weak demand, external shocks
● UBS is calling for copper to reach $15,500 by June 2027, gains driven primarily by the deepening supply shortage.
THREATS
● Speculators reduced their net long positions in COMEX copper by 2,780 contracts to 76,446 contracts – CFTC
● Fed Chairman Kevin Warsh signaled the Fed may need to hike rates.
● Traders are currently pricing in a 68% chance of a rate hike at the Federal Reserve’s policy meeting this month.
● A stronger-than-projected August employment report would reinforce labor market resilience, could reduce pressure for Fed dovishness.
● As per weekly chart, RSI is moving down and MACD bearish crossover expected.
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