Copper rises on China supply concerns

Nov 9 (Reuters) - Copper prices bounced back from last week's rout on Monday as supply concerns persisted in top consumer China, although implications from the US midterm elections on tariffs and AI infrastructure remained a headwind.

Three-month copper on the London Metal Exchange rose 0.81% to $13,880 a metric ton, while the most-traded copper contract on the Shanghai Futures Exchange gained 0.68% to 107,650 yuan ($16,124.93) a ton by 0330 GMT.

In China, premiums hit all-time peaks.

Yangshan copper premium , a gauge of Chinese buyers' appetite for imported units, surged to $215 a ton, while the domestic premium , paid over SHFE contracts, hit 2,615 yuan.

Copper stocks monitored by the Shanghai bourse declined sharply to 33,848 tons last week, the lowest since early January 2024, according to SHFE's latest stock report.

Copper prices were likely to remain weak and rangebound, with overseas markets leading the declines, while tight inventories and high physical premiums in China could limit losses, analysts at Chinese broker Everbright Futures said.

Citi analysts said shortages of scrap and other raw materials had pushed China's copper inventories close to multi-year lows, creating "strong dip-buying restocking potential" if investor selling drove prices lower.

Democrats' midterm sweep raised concerns over tighter US data centre restrictions and reduced prospects for Trump's planned refined copper tariffs, threatening AI-related demand and tariff-driven stockpiling that have supported prices.

Citi said weakening AI sentiment could trigger further selling in copper, while a pullback in US tariff expectations was "likely to prompt risk-off behaviour."

Continued tariff uncertainty could also pressure prices through deliveries into LME warehouses, although an actual tariff announcement could bring speculative buyers back, it added.

The bank cut its zero-to-three month copper price forecast to $13,300 a ton from $14,500.

Among other LME metals, aluminium rose 0.65%, zinc gained 1.10%, lead added 0.27%, nickel slipped 0.02% and tin fell 0.28%.

On the SHFE, aluminium rose 0.58%, zinc slipped 0.22%, lead fell 0.16%, nickel gained 0.45% and tin advanced 0.65%.

($1 = 6.6760 Chinese yuan renminbi)