AI Stock Selloff Weakens Risk Appetite, Copper Prices Slide in Sympathy

Stock News
10/22

On Thursday, copper prices declined alongside other industrial metals, following a selloff in AI-related equities that drained risk appetite from global markets.

On the London Metal Exchange (LME), copper fell as much as 0.7% to $14,260 per ton. Asian stock markets moved lower after earnings from major technology companies failed to convince investors of the durability of the artificial intelligence trade. Copper had previously benefited from this boom due to its use in data centers and power infrastructure.

Copper's retreat from last month's record high of $14,875 per ton was also driven by another factor—market uncertainty over whether the United States will impose tariffs on refined copper, at a time when President Donald Trump's second term is approaching its midpoint. Expectations of higher duties have drawn large volumes of copper into U.S. warehouses this year, squeezing supply in other regions.

"There remains significant uncertainty surrounding copper's supply-demand balance next year," said Zhenting Zhou, a trader at Hangzhou Chenglian Industrial Co. "Mine supply should improve, U.S. import demand may slow, and China's scrap copper supply should also recover. The upside risk for copper prices is limited."

Nevertheless, concerns over supply disruptions persist. Workers at Highland Valley Copper, Canada's largest copper mine owned by Teck Resources (TECK.US), have threatened to strike as early as this Saturday. This is the latest sign of labor tensions: prices near record highs have emboldened employees to push for a larger share of profits.

As of press time, LME copper was down 0.4% at $14,294.50 per ton. Aluminum fell 0.6% to $3,023.50, while nickel gave back 1%—after surging 3.7% in the previous trading session on expectations of coordinated production cuts by Chinese producers in Indonesia. Iron ore in Singapore initially dropped 1.7% to $89.45 per ton, the lowest in nearly two years, before paring its losses.

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