Will Persistent Demand Drive Copper Prices to Rs 980-Rs 1,020 per kg?
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Synopsis
As copper prices near a critical threshold, will demand continue to push them higher? A recent report points to a potential surge to Rs 980-Rs 1,020 per kg in the domestic market, driven by key factors such as inventory shortages and a declining US dollar. Read on to discover the future outlook for copper pricing.
Key Takeaways
- Copper prices are expected to surge to Rs 980-Rs 1,020 per kg.
- Supply shortages are contributing to price increases.
- The US dollar's decline is favoring commodity trading.
- Inventory levels are at a two-year low.
- Market sentiment is shifting towards optimism.
New Delhi, July 5 (NationPress) Following a notable bullish trend, nearing the psychological barrier of $10,000, copper prices are set to surge to Rs 980-Rs 1,020 per kg domestically and $10,800-$11,000 per metric tonne on the London Metal Exchange (LME) shortly, according to a report released on Saturday.
Favorable factors, such as a balance between surplus forecasts and ongoing demand worries, a dip in the US dollar, and anticipations of interest rate reductions, are propelling the upward momentum for copper, as highlighted by Motilal Oswal Financial Services.
“The US Dollar Index has significantly dropped to its lowest in three years, driven by moderated Treasury yields and expectations for rate cuts amid lower growth forecasts. The interplay of a weaker dollar and a growing risk appetite among investors is creating a favorable environment for further price increases,” the report noted.
There is a shortage of copper supplies, resulting in strong backwardation in futures prices. The LME cash–3M spread has expanded beyond $100, indicating a lack of copper for immediate delivery.
“Commodity trading advisors and systematic funds have changed their strategies as stronger demand and reduced inventories have prompted a reevaluation of their positions,” stated Navneet Damani, Group Senior VP–Commodity Research at Motilal Oswal Financial Services.
“This change in sentiment typically precedes longer price rallies, especially when the broader economy is on the upswing,” he added.
The report indicates that while COMEX stocks are growing at a faster pace, LME warehouse inventories have plunged below 100,000 tonnes, marking the lowest levels in nearly two years.
The primary reason for this supply crunch is traders rushing approximately 400 kilotons of copper into the US market, anticipating potential import tariffs due to the Trump administration's probe into copper imports initiated earlier this year.
“Despite ongoing volatility and uncertainties in the supply chain, the odds increasingly favor further price gains,” the report concluded.
aps/na
Point of View
The potential rise in copper prices reflects a complex interplay of global factors. As the demand persists and supply chains face challenges, it's essential for stakeholders to stay informed. The Nation stands committed to delivering accurate insights to guide both investors and consumers in navigating this evolving landscape.
NationPress
10/07/2025
Frequently Asked Questions
What factors are driving copper prices up?
Copper prices are rising due to a combination of declining US dollar value, strong demand, and low inventory levels.
How much could copper prices rise?
Reports indicate that copper prices could reach Rs 980-Rs 1,020 per kg in the near term.
What is the current state of copper inventories?
LME warehouse stocks have fallen below 100,000 tonnes, the lowest in almost two years, indicating a supply shortage.
What impact does the US dollar have on copper prices?
A weaker US dollar generally boosts commodity prices, including copper, as it increases investor appetite.
How are traders reacting to the current market conditions?
Traders are adjusting their positions in response to stronger demand and reduced inventories, anticipating further price increases.
