Copper heads for weekly loss amid AI rout, strong dollar

Copper prices were on track for a weekly fall, as concerns surrounding Nvidia and AI investment outweighed support from tight supplies in top consumer China. Benchmark three-month copper on the London Metal Exchange fell 0.20% to $13,561 a metric ton as of 0700 GMT, having lost 1.60% this week. Prices hit a four-month low of $13,515 on Thursday, on AI worries and a stronger US dollar. The most-traded copper contract on the Shanghai Futures Exchange edged up 0.01% to close at 105,150 yuan ($15,766.51) a ton, concluding the week down just 0.07%. Investors turned cautious on tech and AI-linked stocks after Nvidia CEO Jensen Huang resigned on Thursday. The development, together with the Democrats' win in the US midterm elections last week, raised concerns about future spending on data centres that consume copper. "The main risk to our forecast is through positioning rather than physical demand," Goldman Sachs said in a note on Thursday. Copper positioning could remain subdued if equity markets began pricing in an earlier slowdown in AI capital spending, while data-centre construction continued, the firm said. Adding to copper's weakness was a strong dollar amid rising US Treasury yields as investors price in Federal Reserve hikes. Copper found some support from China. The Yangshan copper premium, a gauge of China's appetite for imported metal, rose to a record $240 a ton, as of Thursday. Domestic premium paid over the SHFE copper contract has, however, plunged to 775 yuan a ton, as of Thursday, from a record high of 2,615 yuan set on November 6. Stocks monitored by SHFE declined 18.3% to 27,642 tons this week. Among other LME metals, aluminium fell 0.41%, zinc declined 0.55%, lead slipped 0.11%, nickel lost 0.13% and tin gained 0.75%. On the SHFE, aluminium fell 0.40%, zinc dropped 1.44%, lead rose 0.45%, nickel slipped 0.09% and tin climbed 1.19%. ($1 = 6.6692 Chinese yuan renminbi)