METALS-Copper muted as investors weigh future US interest rate cuts, AI bubble

Reuters
2025/12/18
METALS-Copper muted as investors weigh future US interest rate cuts, AI bubble

SHANGHAI, Dec 18 (Reuters) - Copper was muted on Thursday, with the market focussing on future United States interest rate path amid ebbing confidence in artificial intelligence trade.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 nudged 0.03% lower to 92,360 yuan ($13,114.85) a ton as of 0330 GMT.

The benchmark three-month copper on the London Metal Exchange CMCU3 declined 0.43% to $11,686 a ton.

In his national address on Wednesday, U.S. President Donald Trump said that the next chairman of the Federal Reserve will be someone who believes in lower interest rates "by a lot".

Trump previously indicated that he will announce his choice to replace Fed Chair Jerome Powell, whose term ends in May, early next year.

The President's comments came a week after the Fed lowered policy rate by 25 basis points, which helped copper to outperform its base metal peers.

The market is sceptical about whether any of the known finalists — White House economic adviser Kevin Hassett, Federal Reserve Governors Kevin Warsh and Chris Waller — would lower rates as Trump desired.

The U.S. dollar rose slightly =USD. A stronger dollar weakens the commodities traded in the greenback by making them more expensive for investors using other currencies.

Meanwhile, scepticism around AI deepened after Oracle's ORCL.N data center partner Blue Owl Capital was reported as backing a $10 billion deal for its next facility amid concerns about rising debt and spending. Copper which is a key metal used in data centers.

The red metal still found good support from supply shortage prospects and demand outlook, limiting the scale of today's decline.

Among other SHFE metals, aluminium SAFcv1 was up 0.09%, zinc SZNcv1 gained 0.35%, lead SPBcv1 rose 0.15%, nickel SNIcv1 gained 0.66%, and tin SSNcv1 surged 3.10%.

Elsewhere on LME, aluminium CMAL3 dropped 0.53%, zinc CMZN3 declined 0.46%, lead CMPB3 dipped 0.10%, nickel CMNI3 nudged 0.19% higher, and tin CMSN3 advanced 0.82%.

Thursday, December 18

DATA/EVENTS (GMT)

0745 France Business Climate Mfg, Overall Dec

1200 UK BOE Bank Rate Dec

1315 EU ECB Refinancing, Deposit Rate Dec

1330 US Core CPI MM SA, YY NSA Nov

1330 US CPI MM SA, YY NSA Nov

1330 US CPI Wage Earner Nov

1330 US Initial Jobless Clm 13 Dec, w/e

1330 US Philly Fed Business Indx Dec

($1 = 7.0424 Chinese yuan renminbi)

(Reporting by Dylan Duan and Lewis Jackson; Editing by Harikrishnan Nair)

((Dylan.Duan@thomsonreuters.com;))

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