New Delhi – Copper Futures continue to decline on India’s Multi Commodity Exchange (MCX) as sluggish domestic demand and increasing global supply pressure weigh on the commodity. On Monday, copper prices fell 0.4% to ₹831.10 per kilogram, with speculators trimming positions amid uncertain demand prospects, marking a modest but consistent downward trend.
Demand Struggles in Domestic and Global Markets
In India, copper’s demand for sectors such as construction, power, and electronics has softened recently, leading to reduced speculative interest and declining futures prices on the MCX. According to market analysts, as the November contract settled lower by ₹3.30, domestic copper activity mirrored global trends where demand, particularly in Western economies, remains subdued due to high inflation and interest rates.
Outside India, copper demand has shown mixed signs, with Chinese consumption remaining a bright spot. China, the world’s largest copper consumer, has ramped up usage, largely due to investments in green energy infrastructure. Chinese demand is expected to grow by 4.3% through the end of 2024, offsetting declines elsewhere, yet global copper futures remain under pressure as Western economies pull back on spending and investments.
Global Production Rises, Leading to Oversupply Concerns
The International Copper Study Group (ICSG) recently projected a global surplus in copper for 2024, with refined production set to rise by 4.6% year-on-year. A significant portion of this increase comes from new and expanded smelting capacity in regions like China, Indonesia, and the United States. China alone has seen production grow by 11.5% this year, further intensifying concerns that surplus supply could widen, potentially driving prices down in futures markets worldwide.
The Impact of Copper’s Role in Renewable Energy
Despite current demand challenges, copper maintains a strategic role in renewable energy applications, particularly in electric vehicles (EVs), wind turbines, and solar infrastructure. This long-term demand trajectory provides a safeguard against drastic price declines as global energy transitions accelerate. Analysts suggest that while an immediate recovery in prices may be unlikely, the ongoing energy shift will support copper demand stability over the coming years.
Market Outlook
With November copper futures trading in a narrow range on the MCX and a surplus in global supply expected, market participants are advised to watch for demand trends from China and shifts in Western economies. Near-term price movements are likely to reflect global production adjustments and potential interest rate decisions affecting industrial activity.
Web Team, C6N
