Markets India

Copper prices dropped 0.8% to $13,738 per metric ton, the lowest since July 30, as the metal faces its worst weekly decline since March 20 due to AI investment concerns and Chinese supply constraints.

Copper Falls 0.8% to Lowest Since July on AI-Driven Sell-Off

Copper prices fell for a fourth consecutive session, with the three-month copper rate on the London Metal Exchange hitting its lowest since late July. The decline reflects shifting investor sentiment toward AI-related sectors, as data center expansion costs and supply constraints amplify market volatility. Chinese copper stocks in Shanghai Futures Exchange warehouses plummeted 24% to 33,848 tons, the lowest in nearly three years, while the Sh FE copper curve entered backwardation, with the cash contract trading at a $117.50 per ton premium over the three-month forward.

The weekly drop of 2.9% is the steepest since March 20, driven by falling technology shares and fears of reduced AI investment. Aluminum, zinc, lead, and nickel also declined, while tin rose 0.9% after a prior day’s drop. Analysts note that tight supply outside the US and Chinese warehouse stock reductions are exacerbating price swings, with backwardation signaling near-term physical scarcity on the LME.

Copper producers face reduced demand as prices fall, while Chinese manufacturers risk supply shortages. Tech firms and AI developers may see higher costs for data center infrastructure, adding pressure on commodity-linked sectors. Regulatory uncertainty over AI investment could prolong volatility, though tight supply conditions outside the US may support prices in the short term.

The decline underscores heightened market anxiety over AI-driven investment shifts and supply constraints, potentially disrupting industrial demand and commodity pricing dynamics. However, the key uncertainty remains whether the drop marks a sustained correction or temporary volatility amid broader economic and technological shifts.

Copper’s sharp decline highlights AI-related market uncertainty, with tight supply constraints limiting downside but leaving the path forward unclear.

Topics: Copper Prices, AI Investment, Commodity Markets, Supply Constraints, Metal Prices, Financial Markets, China Economy, Market Volatility, London Metal Exchange, Shanghai Futures Exchange

#CopperPrices #AIInvestment #CommodityMarkets #SupplyConstraints #MetalPrices #FinancialMarkets #ChinaEconomy #MarketVolatility #LondonMetalExchange #ShanghaiFuturesExchange

Source: ET Markets