Copper stocks were among the top decliners in the Hong Kong market. As of the time of writing, China Nonferrous Mining Corporation (01258) fell 12.45% to HKD 15.96; Jiangxi Copper (00358) dropped 9.2% to HKD 47.94; MMG (01208) declined 8.71% to HKD 10.38; and CMOC (03993) was down 6.84% to HKD 22.62.

The recent sell-off was triggered by concerns in the AI sector. Microsoft's second fiscal quarter results revealed that the company's quarterly capital expenditure surged to a record high, while its cloud business sales growth slowed, sparking investor worries that its massive investments in artificial intelligence might take longer than expected to yield returns.

According to Galaxy Futures' market analysis, after the rapid surge in gold and silver prices, copper prices followed at a relatively slower pace, with disruptions in copper mining acting as the catalyst for this round of gains. Fueled by sentiment and capital flows, domestic overnight trading saw copper prices hit a high of 114,160 yuan per ton.

Subsequently, as AI stocks like Microsoft and Oracle plummeted, long positions quickly exited the market, causing copper prices to erase all intraday gains and fall to a low of 104,550 yuan per ton.

Guotai Haitong indicated that short-term copper prices are facing volatility and pressure due to adjustments in macroeconomic sentiment and Nvidia's downward revision of copper demand forecasts for data centers.

However, copper ore supply remains tight, with spot copper concentrate treatment charges continuing to decline. The demand logic driven by AI and power grid construction persists; recently, State Grid Corporation of China projected fixed asset investment during the 15th Five-Year Plan period to reach 4 trillion yuan, a 40% increase compared to the 14th Five-Year Plan period.

Simultaneously, the trend of loose liquidity both domestically and internationally remains unchanged, providing strong support for copper prices.