Copper falls, heads for worst week since March on AI rout

By Reuters News

- Copper fell for a fourth straight session on Friday and was on course for its biggest weekly drop since March, weighed down by a rout in technology stocks, although supply concerns limited the downside.

Benchmark three-month copper on the London Metal Exchange was down 0.8% at $13,738 a metric ton as of 1030 GMT. It earlier declined as much as 1.5% to $13,636, its lowest since July 30, but found support from its 200-day moving average.

The metal is on track for a 2.9% drop this week, which would mark its steepest weekly loss since the week ended March 20.

The weakness reflects worries over AI investment, with copper increasingly influenced by "sentiment towards data centre expansion," said Craig Lang, principal analyst at CRU.

Nasdaq futures climbed on Friday as chip stocks gained ground after a technology-led slide on fears that Democratic control of the US Congress could lead to tougher AI regulation.

Lang said he would be cautious about labelling copper's dip a sustained correction, given "ongoing mine supply challenges and exceptionally tight metal availability outside the US."

Copper stocks in Shanghai Futures Exchange warehouses fell more than 24% this week to just 33,848 tons — the lowest in almost three years and less than a day's worth of Chinese consumption.

The ShFE copper curve is in backwardation, a market structure where prices for prompt delivery are higher than those further forward.

"Timespreads are pointing to the scarcest environment for ShFE copper since 2022," Deutsche Bank said in a note.

The cash LME copper contract was trading at a $117.50 a ton premium over the three-month forward , indicating ongoing near-term tightness on the LME outside the US.

Aluminium fell 0.8% to $3,039 a ton, zinc shed 1.7% to $3,730, lead lost 0.6% to $1,883.50 and nickel eased 0.6% to $16,225 after jumping about 3% in the previous two sessions on concerns over shortages from Indonesia.

Tin was the sole gainer, climbing 0.9% to $45,890 after Thursday's 3.2% drop.

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