Copper prices diverge as US rate outlook, AI sentiment weigh

SHANGHAI: Copper prices move in opposite directions on Thursday, as the market focussed on the outlook for US interest rates, while waning confidence in the artificial intelligence sector weighed on sentiment.

The most-traded copper contract on the Shanghai Futures Exchange closed 0.23% higher at 92,600 yuan ($13,151.73) a metric ton.

The benchmark three-month copper on the London Metal Exchange declined 0.16% to $11,718.50 a ton, as of 0718 GMT.

In his national address on Wednesday, US President Donald Trump said that the next chairman of the Federal Reserve will be someone who believes in lower interest rates “by a lot”.

Trump previously indicated that he will announce his choice to replace Fed Chair Jerome Powell, whose term ends in May, early next year.

President Trump’s comments came a week after the US central bank lowered its policy rate by 25 basis points, which helped copper to outperform its base metal peers.

The market is sceptical about whether any of the known finalists, White House economic adviser Kevin Hassett, Federal Reserve Governors Kevin Warsh and Chris Waller, would lower rates as Trump desired.

The dollar edge higher, weakening the greenback-priced commodities by making them more expensive for investors using other currencies. Meanwhile, scepticism around AI deepened after Oracle’s data center partner Blue Owl Capital was reported as backing a $10 billion deal for its next facility amid concerns about rising debt and spending. Copper is a key metal used in data centers.

The red metal still found good support from supply shortage prospects and demand outlook, limiting the scale of the session’s decline.

Among other SHFE metals, aluminium was up 0.25%, zinc gained 0.52%, lead nudged 0.06% higher, nickel gained 1.07%, and tin surged 2.88%.

Elsewhere on LME, aluminium dropped 0.45%, zinc declined 0.36%, lead dipped 0.13%, nickel gained 1.10%, and tin advanced 0.37%.