Copper falls, heads for fifth straight weekly drop on AI rout
- Benchmark three-month copper on the London Metal Exchange was down 0.5% to $13,519 per metric ton
Copper slipped to its lowest in almost four months on Friday and was on course for a fifth weekly dip in a row on mounting concerns around AI investment.
Benchmark three-month copper on the London Metal Exchange was down 0.5% to $13,519 per metric ton as of 1000 GMT after earlier hitting $13,456, its lowest since July 17.
The metal was on course for a 1.8% drop this week, having lost ground every week since mid-October.
“The LME copper price has fallen around 7% over the past month to $13,588/t, largely driven by the volatility in AI-related equities, which sold off following the Democratic sweep” in the US midterm elections, Goldman Sachs said in a note.
Investors turned even more cautious on AI-linked stocks — which copper is exposed to, given its use in electrification and data centres — after Nvidia CEO Jensen Huang resigned on Thursday.
Goldman Sachs attributed the recent correction in copper prices to positioning rather than loosening fundamentals.
Copper positioning could remain subdued if equity markets began pricing in an earlier slowdown in AI capital spending, while data-centre construction continued, the bank said. It noted, however, that there was limited copper supply in top consumer China, where inventories are low and premiums are high.
Copper stocks in Shanghai Futures Exchange warehouses declined a further 18.3% to just 27,642 tons this week, the lowest since December 23. The Yangshan copper premium, paid on top of LME prices and a gauge of China’s appetite for imports, hit a record $285 a ton on Friday.
Elsewhere, aluminium was down 0.7% to $3,007.50 a ton after hitting its lowest since October 15. The premium of the cash LME contract over the three-month forward eased to $131 a ton from a 36-year high on Thursday.
Zinc declined 1% to $3,678.50, touching its lowest since October 23, while lead lost 0.2% to $1,882.50 and nickel shed 0.4% to $16,150 as a strong dollar weighed on the complex.
Tin was the sole gainer, adding 0.9% to $47,080.
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