Copper: AI slowdown fears pressure prices – ING

ING’s Warren Patterson and Ewa Manthey highlight that Copper is retreating as calls from major technology executives to slow AI development hit tech stocks and dampen expectations for data-centre investment. They add that rising inventories, softer nearby spreads and improving exchange availability signal easing tightness on the LME, though they still see persistent mine-supply constraints supporting prices once current positioning unwinds.

Tech sentiment and LME balance weigh

"In base metals, copper continued to pull back. Calls from leading technology executives to slow AI development hit tech stocks and weighed on copper, raising concerns over the outlook for data-centre investment."

"This added to pressure from signs of improving exchange availability, which eased some of the supply concerns that had driven prices to record highs."

"Rising inventories and softer nearby spreads suggest that the extreme tightness across the LME market is beginning to moderate. A stronger dollar and cautious sentiment ahead of the Fed meeting also weighed on the wider base metals complex."

"In the near term, copper could remain under pressure as stretched positioning unwinds. Persistent mine-supply constraints should continue to support prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)