Copper Falls to $13,515 a Ton as AI Fears Meet a Squeezed Physical Market

The paper market is cracking while the real one tightens. Benchmark three-month copper on the London Metal Exchange fell to $13,515 a ton Thursday, and an early Friday bounce fizzled, leaving the metal roughly 9% under September's record of $14,875. The selling came from financial players, not from any surplus of metal.

Copper has been trading as a stand-in for AI infrastructure, so the tech selloff dragged it down — and news that Nvidia CEO Jensen Huang is stepping down added fresh doubts about data-centre spending. "Every time AI takes a hit, copper demand and prices come under pressure too," said Tom Price, analyst at Panmure Liberum. Rate worries piled on: a hotter-than-expected US inflation print revived hike bets, and Fed officials haven't ruled out a 50-basis-point move at the December 8–9 meeting. A stronger dollar set model-driven funds selling.

Deutsche Bank sees lower odds of US tariffs on refined copper, unwinding the trade that had pulled metal into the US. China is moving the opposite way: Shanghai Futures Exchange warehouse stocks dropped 24% in one week, now at 33,848 tons — the lowest in almost three years and less than one day of Chinese consumption. The Yangshan premium, which tracks China's demand for imported copper, hit a record $240 a ton Thursday.

Goldman Sachs' Jimmy McGeoch called the physical market "tight as a drum," according to Robert Ivanhoe, who pointed to record-low smelter processing fees, Chinese smelter production cuts and new grid tenders from China's major grid operators. He warned Chinese inventories could be depleted by year-end. Deutsche Bank's Daniel Ghali framed the standoff bluntly: bears need a recessionary spiral, while bulls only need the status quo to hold.

The technical damage is real even if the sell-off is happening on paper. Copper lost its rising support trend line in late October, and that line acted as resistance when price retested it on October 30. Thursday's close was its first below the 200-day moving average since this rally began — the same line held the March 23 swing low. The breakdown also took out the 0.382 Fibonacci retracement at $6.31 and a horizontal support zone, with price now near $6.21 and its first lower low in months.

Next supports: the 0.5 Fibonacci level at $6.11, then the 0.618 retracement at $5.91 lining up with long-term support, about 4.8% below current prices. The RSI sits near 35 and is falling, so copper isn't oversold yet, and volume has eased since the November 4 and 9 selloffs while price keeps sliding. December's Fed meeting and China's import premiums will show which side wins.