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Copper prices fell 2.2% to a seven-week low on Tuesday, hitting $14,036 per metric ton on the London Metal Exchange as traders weighed AI demand and US-Iran diplomacy progress.
The decline followed unconfirmed reports of peace talks progress in the US-Iran conflict, which pushed bond yields and the dollar higher, pressuring metals priced in US currency. Copper dropped 2.5% to $6.4020 per pound on Comex, while tin fell 4.5% to its lowest since April. The price drop signals renewed scrutiny of AI demand's impact on copper, which had previously driven a 13% annual rally. Uncertainty over US import tariffs on refined metals now weighs on prices, threatening to break a two-month price range.
Copper producers and investors face lower revenues and price volatility. AI infrastructure companies may see supply chain risks due to reduced demand for copper. Global markets, particularly South Korea’s tech sector, experienced pressure as AI spending concerns spread. Oil prices also declined amid the unconfirmed peace talks progress.
The decline underscores how geopolitical and AI-related uncertainties are reshaping metal demand narratives. While AI infrastructure could still drive long-term copper demand, short-term volatility persists due to tariff uncertainty and shifting investor sentiment toward risk-off positions. RBC Capital Markets analysts noted the AI demand narrative for copper is under renewed scrutiny.
Copper is up 13% year-to-date but faces pressure to exit its two-month price range. South Korea’s tech-heavy stock market faced pressure as AI spending concerns grew, while US equities rebounded after a gauge of chipmakers rose.
Copper’s decline reflects heightened scrutiny of AI demand and geopolitical uncertainties, with the key uncertainty being whether AI infrastructure spending will sustain copper’s long-term rally.
Topics: Copper Prices, AI Demand, US Iran Diplomacy, Metal Markets, South Korea Tech, US Equities, Comex, LME, Global Markets, Geopolitical Risk
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Source: LiveMint
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