27-02-2026
Executive Summary:
Copper futures remained firm near recent highs, marking a second straight weekly gain as markets await
fresh demand cues from China’s upcoming parliamentary “Two Sessions” meeting. Investors are closely
watching the event for policy signals, including details of the government’s 15th Five-Year Plan, which
will outline economic priorities for the coming years and could shape industrial demand expectations.
Despite the supportive tone in prices, physical demand from China has been relatively subdued. Many
buyers have been cautious following the Lunar New Year holiday, with some importers delaying
purchases due to elevated price levels. Domestic fabricators are also gradually resuming operations,
limiting immediate consumption. Meanwhile, exchange-monitored inventories have climbed to record
levels, influenced by shifting U.S. trade policies and supply-side disruptions at mines, adding another
layer of complexity to the market outlook.
27-02-2026
Key Drivers:
Industry Earnings and Sector Importance
Recent earnings report from major diversified miners such as BHP Group and Rio Tinto highlighted
copper’s growing contribution to profitability, in some cases surpassing traditional revenue drivers like
iron ore. This shift reflects copper’s strategic importance in the global energy transition, electrification,
renewable infrastructure, and electric vehicle supply chains. Mining companies are increasingly
prioritizing copper assets in capital expenditure plans, signaling long-term confidence in structural
demand growth. Even amid short-term price volatility, the strong financial performance of copper
divisions underscores its role as a core industrial metal with long-duration demand visibility.
Demand Outlook:
Demand expectations remain closely tied to China’s post-holiday recovery, as the country accounts for
a significant share of global copper consumption. Market participants are closely monitoring signs of
improvement in manufacturing activity, infrastructure spending, property stabilization, and electric
vehicle production. While some seasonal restocking typically occurs after the Lunar New Year break,
the rebound in physical buying has so far appeared gradual rather than aggressive. Investors are
awaiting clearer confirmation from official economic indicators and policy guidance from Beijing
before pricing in a sustained demand upswing. Until stronger industrial momentum becomes visible,
demand optimism is likely to remain cautious and data-dependent
Dollar, Bonds and Economic Data:
Movements in the US dollar, global bond yields, and monetary policy expectations directly affect
investor appetite for industrial metals. A stronger dollar typically pressures copper by raising its cost for
non-US buyers, potentially dampening import demand. At the same time, global growth indicators such
as manufacturing PMIs, inflation data, and central bank policy signals shape risk sentiment across
commodity markets. As a cyclical asset closely linked to economic activity, copper often reacts quickly
to shifts in macro outlook, making broader financial conditions an essential component of short-term
price trends.
27-02-2026
LME & SHFE Inventory Data
LME Copper Inventories
LME copper stocks were reported at around 253,600–253,700 tonnes by late February, marking a
modest increase in recent weeks. This level remains elevated relative to earlier months, reflecting
ongoing inflows into exchange warehouses even as physical demand remains tentative.
SHFE Copper Inventories
On the Shanghai Futures Exchange (SHFE), copper stocks have climbed noticeably, with recent SMM
data showing approximately 272,475 tonnes, up significantly from earlier in the year. The rise in SHFE
inventories indicates that Chinese domestic warehouses are also building up supplies as buyers remain
cautious after the Lunar New Year holiday.
Combined Global Inventory Trends
Combined inventories across major exchanges (LME, SHFE, and COMEX) have exceeded 1 million
tonnes, the highest level in over two decades, as reported by market analysts. This elevated total
stockpile highlights a unique imbalance: despite strong long-term demand narratives, short-term
physical uptake has been muted, leading to greater metal accumulation on exchanges.
27-02-2026
Commodity Futures Trading Commission (CFTC)
According to the latest available Commitments of Traders (COT) data from the Commodity Futures
Trading Commission (CFTC), positioning in copper futures shows that large speculators (such as hedge
funds and managed money) currently hold a net-long stance, with speculative longs increasing modestly
in recent weeks, indicating that funds are stepping back into bullish exposure after earlier retrenchment.
At the same time, commercial hedgers tend to hold more short positions, reflecting their role in mitigating
price risk rather than pursuing directional bets. This positioning data helps gauge whether recent rallies
are backed by real investor demand or speculative flows heavy net longs can signal crowded bullish bets
that risk correction, whereas lighter positioning leaves room for further upside if demand fundamentals
improve.
27-02-2026
Mine Disruptions & Production Updates
Recent developments in major copper-producing countries have added to supply concerns. In Chile the
world’s largest copper producer production has been challenged by lower ore grades at key operations
such as Escondida and Collahuasi, operational shocks from the 2025 El Teniente mining accident, and
ongoing labour issues at the Mantoverde mine, which has seen partial strikes and reduced output. These
factors have constrained output and pressured the broader supply pipeline. In Peru, while some operations
have shown strong quarterly grades and production gains, social unrest and temporary interruptions have
also affected mining activity. Together, these disruptions are contributing to tighter supply expectations
for 2026, keeping the market alert for further production variability and its potential impact on copper
prices.
27-02-2026
Technical Analysis:
Copper has rebounded firmly from the key support zone near 1180, signaling renewed buying interest at
lower levels and reinforcing a constructive short-term trend as long as this base holds. A buy-on-dips
approach around 1200 can be considered, with a stop loss placed at 1170 to limit downside risk in case
of a breakdown below support. On the upside, immediate resistance is seen near 1240, followed by a
higher target around 1280, keeping the overall bias cautiously bullish while prices sustain above the
1180–1170 support range. Recommendation:
Buy: 1200
Target: 1240-1280
Stop Loss: 1170
27-02-2026
DETAILS OF RESEARCH ANALYST