Copper Falls 3.2% to Three-Month Low on AI Selloff

Semiconductor Sell-Off Reaches Industrial Metals

Copper (COPPER) slid to a three-month low this week as worries over the artificial-intelligence boom spread from technology shares into commodities. On Tuesday the metal dropped 3.2% to $13,883 per ton on the London Metal Exchange. Prices recovered on Wednesday and climbed back above $14,100 after the US midterm elections, yet the bounce leaves the market well short of the September record of $14,875 per ton and raises a pointed question about whether the historic rally is losing momentum. The market now sits nearly $1,000 per ton below its September peak. That record capped a run in which copper, long the workhorse of electrification, was repriced as a core AI infrastructure asset.

Two forces sit behind the retreat. The first is the rout in AI-linked stocks, which has shaken confidence in the spending wave behind new data centers. Copper is essential to electrical infrastructure, a link that turned the metal into a popular proxy for AI expansion, and every new data center needs cabling, transformers and grid upgrades built around the metal. Data-center construction had been the fastest-growing source of incremental demand in the AI narrative, and doubts about its funding now feed directly into the metal's demand outlook. That rebranding is what made the metal vulnerable when the equity side of the trade came under pressure. Marex analyst Ed Meir said copper appeared to be “catching up” with the recent semiconductor selloff, a framing that treats the drop as the metals market repricing an AI trade rather than a demand-led collapse. Copper trades in tons on the LME and in pounds in the US market, and this week both benchmarks pointed the same way.

Tariff Bets Fade After the Midterms

The second force came from Washington. The Democratic win in both chambers of Congress in Tuesday's midterm elections has cut expectations that the United States will impose tariffs on refined copper. Duties on refined metal, had they landed, would have made imported copper costlier inside the United States and rewarded anyone holding stockpiles onshore. That was the trade the market had been making: fearing tariffs, American traders stockpiled the metal, draining supplies elsewhere and helping drive prices to the September record. Saxo Bank's Ole Hansen has warned that lower tariff expectations could now weigh on prices, and his post-election comment described a rollercoaster across financial markets, with the AI and data-center rollout potentially facing scrutiny that dampens demand from that sector. The striking part of the week, though, is what has not changed. China's Yangshan copper premium, the surcharge importers pay on top of the international price for metal delivered to Chinese ports, stands close to $200 per ton, a decade high. Chinese warehouse inventories, for their part, have fallen more than 75% over six months, a drawdown that leaves the physical market tight even as investor positions unwind. Six months of drawdowns mean Chinese buyers have little buffer if imports fail to keep pace with consumption. The result is an unusual split: investors selling copper on economic uncertainty while physical buyers keep competing for limited supplies. J.P. Morgan, despite the short-term weakness, forecasts a fourth-quarter average of $14,800 per ton for copper, citing supply constraints. The next test is whether demand from China can outweigh the weakening confidence in AI investment.

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Live COINOTAG readings put copper at $6.43, inside a 24-hour range of $6.29 to $6.49, with the daily trend still a downtrend. The desk's composite scoring, which blends moving averages, Fibonacci and volume-profile signals into one 0-to-100 rating, marks $6.34 as the strongest support, a 100/100 line, while the first resistance of note sits at $6.45, scored 93/100. Momentum indicators agree with the bearish read: the 14-day RSI stands at 39.7 and the MACD signal is negative. A daily close below $6.34 would extend the slide; holding that line, with the Yangshan premium near decade highs, keeps a rebound scenario alive.