Copper prices experienced a notable decline on Tuesday, primarily driven by an oversupply of copper and apprehensions surrounding the upcoming U.S. Federal Reserve meeting.

Stocks of copper listed with the London Metal Exchange (LME) witnessed a significant surge in just two months, reaching their highest levels since May 2022.

While the U.S. Federal Reserve is unlikely to raise interest rates in the forthcoming meeting. Financial markets remain on edge, fearing prolonged high rates to tackle inflation.

Additionally, the declining LME time-spreads suggest an increasing likelihood of more copper heading to exchange warehouses.

The surplus copper in the market dampens hopes of a robust economic recovery in China, the largest consumer of copper.