Copper fell for a fourth straight session on Friday and was on course for its biggest weekly drop since March, weighed down by a rout in technology stocks, although supply concerns limited the downside, Reuters reported. Benchmark three month copper on the London Metal Exchange was down 0.5 percent at 13,775 dollars a metric ton in official trading, after falling as much as 1.5 percent to 13,636 dollars, its lowest since July 30, before finding support at its 200 day moving average. The metal is on track for a 2.6 percent fall this week, its steepest weekly loss since the week ended March 20. In the site market tables, US copper closed at 6.22 dollars a pound, down 0.5 percent on the day and 3.72 percent on the week.
The selling is a narrative trade. Copper is used heavily in electrification and AI infrastructure, and a technology led slide on fears that Democratic control of the US Congress could lead to tougher AI regulation has investors questioning the data centre demand premium. Deutsche Bank head of metals research Daniel Ghali wrote that markets are digesting a perceived reduction in the potential for US import tariffs on refined copper, and the long standing premium of COMEX prices over LME prices briefly flipped to a discount overnight before recovering. Ghali said copper tariffs remain firmly under President Trump’s authority, and that bears need a recessionary spiral from here while bulls only need the status quo trend to persist.
The physical market is moving the other way. Copper stocks in Shanghai Futures Exchange warehouses fell more than 24 percent this week to 33,848 tons, the lowest in almost three years and less than a day’s worth of Chinese consumption. The Yangshan premium, a gauge of Chinese appetite for copper imports, rose to a record 217.50 dollars a ton, and the cash LME contract traded at a 181 dollar a ton premium over the three month forward, indicating near term tightness outside the US. Separately today, Bloomberg reported that Trafigura has been buying large volumes of copper in Asia as local supplies dwindle and regional spot premiums reach record highs, a story published on this site this morning and graded C because it rests on that single report.
The rest of the LME complex followed futures lower on Friday: aluminium fell 0.5 percent to 3,049 dollars a ton, zinc shed 1.6 percent to 3,734 dollars, lead lost 0.5 percent to 1,885 dollars and nickel eased 0.2 percent to 16,285 dollars after jumping about 3 percent in the previous two sessions on Indonesian shortage concerns. Tin was the sole gainer, climbing 1.7 percent to 46,250 dollars after Thursday’s 3.2 percent drop.