Copper Prices Continue to Fall Amid Decline in AI Stock Quotes

Copper extended last week's decline: shares of companies related to artificial intelligence were once again under pressure, undermining risk appetite ahead of the Federal Reserve meeting. The metal, used in data centers and energy infrastructure, fell as much as 0.6% in London on Monday – following the second consecutive weekly decline. Stocks continue to struggle as investors brace for new reports from mega-cap tech companies and await signals on whether the recent pressure on AI-related trading will persist.

Market participants are also assessing the persistently high energy prices ahead of the Fed meeting on Wednesday. The market is pricing in nearly a 10% chance of a rate hike at this meeting, although the odds of a hike by the end of the year are significantly higher – over 70%. Higher borrowing costs are an obstacle to economic growth and demand for raw materials.

Meanwhile, copper inventories in China remain constrained due to a decline in domestic production and the global flow of metal to the US in anticipation of import tariffs. The Yangshan premium – an indicator of demand for imported copper – has risen to the highest level on record since 2017.

Doubts about whether the US will ultimately impose tariffs and the weakening of Chinese consumption towards winter may help ease market tensions, said Wu Quinjing, head of the base metals research department at Minmetals Futures.

As of 11:37 a.m. Shanghai time, copper on the London Metal Exchange fell 0.5% to $14,247.50 a ton. Other metals traded unchanged or declined: aluminum by 0.4%, nickel by 0.9%.