Copper edges lower as higher oil, AI doubts weigh

Copper drifted lower on Friday, although steady for the week so far, with higher oil prices threatening to weigh on demand and a tech stock slump dampening risk appetite. Benchmark three-month copper on the London Metal Exchange was down 0.43% at $14,294.5 a metric ton by 0711 GMT. The most-traded copper contract on the Shanghai Futures Exchange fell 0.71% to 108,930 yuan ($16,353.40) a ton. Brent crude gained about 1%, after Yemen's Iran-aligned Houthis stepped up attacks on Saudi Arabia. "Higher oil prices dampen macroeconomic demand and act as a tax on global economic activity, dampening industrial production," said Angela Durrant, director-commodities analysis, at Commonwealth Bank. In the stock markets, technology shares slumped over concerns about high AI spending. Copper had been supported by AI infrastructure demand expectations, though attendees at last week's London industry gathering downplayed that. "Few participants believed AI was a significant driver of copper demand," BNP Paribas' head of metals strategy David Wilson and commodity desk strategist Elena Lee said in a post-LME Week note. Meanwhile, tin, which has also benefited from expectations of higher demand tied to AI hardware, fell sharply. Benchmark LME tin was down 2.23% at its lowest in four months. Support for copper nonetheless came from signs of continued good demand in China, where inventories have waned. Stocks in SHFE-monitored warehouses fell nearly 18% in the week till Friday, to 44,612 tons, exchange data showed. The Yangshan premium , a gauge of China's appetite for imported copper, fell 2.44% to $200 a ton on Thursday but was still close to its highest in over a decade. Among other LME metals, aluminium was steady, zinc lost 0.46%, lead dipped 0.23%, nickel dipped 0.17%. On the SHFE, aluminium gained 0.78%, zinc was little changed, down only 0.04%, lead rose 1.54%, nickel lost 0.91% and tin dropped 5.76% to its lowest since April.