AI Stock Rout Drags Copper to Three-Month Low

Copper is bouncing back — but only after taking a hard hit. Prices climbed back above $14,100 per ton on the London Metal Exchange Wednesday, the day after the US midterm elections, following a 3.2% slide that had landed the metal at $13,883 per ton, a three-month low.

The culprit isn't copper itself. It's the AI trade. This week's rout in AI and semiconductor stocks rattled confidence in the massive data center spending boom, and copper — the wiring-and-infrastructure metal that investors have been buying as an AI proxy — got dragged along for the ride. Marex analyst Ed Meir said copper looked like it was “catching up” with the semiconductor selloff.

Politics added a second shove. Democrats swept both chambers of Congress, which cooled expectations of US tariffs on refined copper. That matters because those tariff fears had traders stockpiling metal in America, tightening supplies everywhere else and pumping prices higher. Saxo Bank's Ole Hansen warned that fading tariff expectations could weigh on copper, noting in a post that the election results set off a “rollercoaster” across markets and that the AI and data center rollout may now face more scrutiny, potentially denting demand from that sector.

Here's the twist: the physical market never got the memo. China's Yangshan copper premium, the gauge of what buyers pay for imported metal, is sitting near $200 per ton — its highest in more than a decade. Chinese warehouse inventories have shrunk by more than 75% over the past six months. So while investors bail on uncertainty, actual buyers are still scrapping over scarce supply.

On the daily chart, copper remains stuck in a descending channel since breaking its upward trendline. The $6.31-per-pound zone is the line in the sand, near July's low — a daily close below it could crack the door toward $6.11 and then $5.91. Any sustained rebound runs into resistance around $6.70.

J.P. Morgan is still betting on tight supply, forecasting copper to average $14,800 per ton in the fourth quarter — below September's record $14,875 but well above current levels. The next test is simple: can China's hungry buyers outmuscle the fading faith in AI spending?