Copper set for first monthly loss since June as AI spending worries weigh

LONDON: Copper prices fell on Friday and were on track to snap a three-month winning streak in October as concerns that heavy spending on AI may not generate sufficient returns weighed on risk appetite.

Benchmark three-month copper on the London Metal Exchange (LME) was down 0.9% at $14,227 a metric ton by 1058 GMT, after touching a one-week low of $14,216 earlier in the session.

The metal, used in power and construction, was set to post a 1% decline in October as higher oil prices and jitters in the technology sector prompted a flight to bonds.

Copper continued to draw support from a premium of the LME cash contract over the three-month benchmark, as months of shipments into US stocks have reduced metal availability in traditional consuming hubs.

“Backwardation in copper remains elevated, pointing to persistent near-term tightness,” said Neil Welsh, head of metals at broker Britannia Global Markets.

The Yangshan copper premium, a gauge of Chinese demand for imported copper, remained near a 13-year high of $205 a ton, signalling strong appetite in the world’s top metals consumer.

The premium has been supported by tighter domestic scrap supplies and LME copper’s retreat from the record high of $14,875 a ton reached in September.

On the supply side, Rio Tinto paused underground operations at its Oyu Tolgoi mine in Mongolia following seismic activity and said delays for vehicles crossing the China-Mongolia border had reduced the availability of trucks transporting copper concentrate from the mine.

Among other LME metals, tin fell 1.9% to $48,505 a ton after touching $48,100, its lowest level in more than six months, due to worries about AI-related spending.

However, the premium of the LME cash tin contract over the three-month benchmark hit $350 a ton, highest since April 2024, signalling tight supply. Indonesia’s September refined tin exports fell 18% year on year.

Aluminium and lead were steady at $3,077.50 and $1,914.50, respectively. Zinc eased 0.1% to $3,877.50 while nickel added 0.1% to $15,540.