Copper prices fell 0.5% to $13,778 a tonne on Friday, bringing weekly losses to 2.7% as investors worried that the Democrats' US midterm victory would spark an AI backlash and dampen data centre demand. The red metal has tracked the rout in Wall Street tech stocks following the election result, which is expected to slow the multitrillion-dollar development of new data centres championed by President Donald Trump. Copper had soared to record highs this year on forecasts of demand from AI-driven data centre building, with analysts projecting billions of dollars' worth of the metal will be needed annually by the end of the decade.
Goldman Sachs estimates states with Democratic lawmakers likely to restrict data centres account for about 45% of planned US capacity. About 90% of copper stocks stored in London Metal Exchange and Comex warehouses are now in the US, up from 20% two years ago, as traders shipped metal to avoid potential 15% tariffs promised by Trump. Analysts say reduced tariff chances after the midterms are weighing on prices, though Deutsche Bank remains bullish, arguing only a recession would cause a significant price drop.
They note Trump still holds executive power to implement tariffs, which could support prices if reinstated.
Source: Financial Times Markets · Summarized by HeadlinesBriefing