Copper rebounds from 3-month low as tightness offsets tariff, AI fears

LONDON: Copper prices rebounded on Wednesday from their weakest in three months as initial fears about the impact of the US election on tariffs and AI data centres were offset by healthy demand and shortages outside the US.

Benchmark three-month copper on the London Metal Exchange was up 0.5% at $14,103 a metric ton by 1115 GMT. It earlier fell as much as 1.5% to its lowest since August 3.

The sharp losses were a knee-jerk reaction to the results of the US elections on Tuesday, in which Democrats seized control of both the Senate and House of Representatives, said Ole Hansen, head of commodity strategy at Saxo Bank.

“You could initially think that copper could be the one to be hurt the most since the market may lower its expectations for tariffs,” he said.

“They may also focus on the AI trade given how data centres suddenly became such a big issue in the final part of the election.”

The prospect of US tariffs on refined copper has spurred a large flow of metal to the US, creating shortages elsewhere and propping up prices, but any announcement that tariffs would not be imposed would free up that overhang and weigh on the market.

President Donald Trump has been a big supporter of the AI sector, which is expected to give a boost to copper demand from its use in infrastructure, but growing numbers of communities are opposing data centres.

Copper prices were supported, however, by continuing firm demand and shortages in top metals consumer China.

The Yangshan copper premium, a gauge of demand for imported metal, remained near $200 a ton — its highest in more than a decade.

Also boosting the metals market was a recovery in global stock markets and a weaker dollar index, making commodities priced in the US currency cheaper for buyers using other currencies.

Among other metals, aluminium gained 1% to $3,075 a ton, zinc rose 1.3% to $3,839, lead added 0.3% to $1,890, nickel advanced 2.2% to $15,685 and tin rose 0.9% to $47,850.