Copper snaps back as AI worries fade, shortages persist in China
LONDON: Copper prices picked up on Wednesday after dropping in the previous session on a recovery in investor sentiment about AI companies and shortages in top metals consumer China. Benchmark three-month copper on the London Metal Exchange gained 0.8 percent to USD13,793 a metric ton in official open-outcry trading, having lost 1.6 percent on Tuesday and recording its biggest weekly drop since March last week.
Much of the losses were due to fears that the sweep by Democrats in the US midterm elections would lead to tougher AI regulation, curbing demand in a fast-growing area for copper. “Stock markets are rebounding so that’s helping underpin metals prices. The tech sector hasn’t collapsed yet and doesn’t look like it wants to,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Stocks rose on Wednesday as investors focused on a renewed wave of AI optimism after strong results from AI infrastructure firm CoreWeave. “The stock market is allowing the market to refocus a little more on the fundamentals, which certainly still remain firmly supportive when we look at China.” Premiums have soared in China for spot physical copper cathode as domestic smelter output declined and arrivals of seaborne metal remained limited.
The Yangshan copper premium, which reflects demand for copper imported into top metals consumer China, remained for a third consecutive day at a record USD230 a ton.
LME aluminium rose 1.7 percent to USD3,062 a ton after hitting a three-week low on Tuesday, hurt by rising exports from China and mounting hopes for an end to the conflict in the Middle East, a key production area for the metal.
Aluminium Bahrain, the Middle East’s biggest aluminium smelter on one site, posted a 38 percent jump in production in the third quarter from the previous quarter, although sales declined.
Declining aluminium stocks in LME-registered warehouses boosted the premium, or backwardation, on the near-term cash aluminium contract over the LME’s three-month benchmark to USD129 a ton, its highest in 30 years. Among other metals, LME zinc rose 0.9 percent to USD3,744 a ton, lead was little changed at USD1,878, nickel gained 0.7 percent to USD16,135 and tin advanced 1.2 percent to USD46,850.