Copper prices rebounded on Wednesday from their weakest level in three months, as early concerns that the US election could reduce expectations for copper tariffs and AI data centre demand were offset by healthy demand and shortages outside the US.
Benchmark three-month copper on the London Metal Exchange was up 0.2% at US$14,058 ($20,002.85) a tonne by 17:20 GMT. It earlier fell as much as 1.5% to its lowest level since 3 August.
US Comex copper futures gained 0.6% to US$6.44 a pound.
The sharp losses were a knee-jerk reaction to the results of the US elections on Tuesday, in which Democrats seized control of both the Senate and House of Representatives, said Ole Hansen, head of commodity strategy at Saxo Bank.
“You could initially think that copper could be the one to be hurt the most since the market may lower its expectations for tariffs,” he said. “They may also focus on the AI trade given how data centres suddenly became such a big issue in the final part of the election.”
The prospect of US tariffs on refined copper has spurred a large flow of the metal to the US, creating shortages elsewhere and propping up prices. Any announcement that tariffs would not be imposed could free up that overhang and weigh on the market.
President Donald Trump has been a big supporter of the AI sector, which is expected to boost copper demand through its use in infrastructure, but opponents of data centres were among the biggest winners of the Democrats’ landslide.
Copper prices were supported, however, by firm demand and shortages in top metals consumer China.
The Yangshan copper premium, a gauge of demand for imported metal, remained near US$200 a tonne, its highest in more than a decade.
A recovery in global stock markets and a weaker dollar index also supported metals, making dollar-priced commodities cheaper for buyers using other currencies.
Among other metals, LME aluminium gained 0.7% to US$3,067 a tonne, zinc rose 0.6% to US$3,812, lead was little changed at US$1,884, nickel jumped 3.5% to US$15,880, and tin dipped 0.2% to US$47,365 after touching its weakest in seven months at US$46,065.
(Reporting by Eric Onstad; Additional reporting by Solomon Cefai in Singapore; Editing by Maju Samuel, Tasim Zahid and Joyjeet Das)
