LONDON: Copper prices picked up on Wednesday after dropping in the previous session on a recovery in investor sentiment about AI companies and shortages in top metals consumer China.
Benchmark three month copper on the London Metal Exchange gained 1% to $13,796 a metric ton by 1025 GMT, having lost 1.6% on Tuesday and last week recorded its biggest weekly drop since March.
Much of the losses were due to fears that the sweep by Democrats in the US midterm elections would lead to tougher AI regulation, curbing demand in a fast-growing area for copper.
“Stock markets are rebounding so that’s helping underpin metals prices. The tech sector hasn’t collapsed yet and doesn’t look like it wants to,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Stocks rose on Wednesday as investors focused on a renewed wave of AI optimism after strong results from AI infrastructure firm CoreWeave.
“The stock market is allowing the market to refocus a little more on the fundamentals, which certainly still remain firmly supportive when we look at China.”
Premiums have soared in China for spot physical copper cathode as domestic smelter output declined and arrivals of seaborne metal remained limited.
The Yangshan copper premium, which reflects demand for copper imported into top metals consumer China, remained for a third consecutive day at a record $230 a ton.
LME aluminium bounced by 1.3% to $3,050 a ton after hitting a three-week low on Tuesday, hit by rising exports from China and hopes for an end to the conflict in the Middle East, a key production area for the metal.
The London weakness hit prices overnight on the Shanghai Futures Exchange, where aluminium prices touched an 11-month low.
Declining aluminium stocks in LME-registered warehouses boosted the premium, or backwardation, on the near-term aluminium contract over the LME’s three-month benchmark.
Among other metals, LME zinc rose 1.1% to $3,753 a ton, lead rose 0.1% to $1,879, nickel gained 0.9% to $16,170 and tin added 0.6% to $46,595.
Source: brecorder
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