Copper prices fall on fears of AI backlash

{"text":[[{"start":8.4,"text":"The price of copper has fallen to its lowest point since July on fears that the Democrats’ sweeping victory in this week’s US midterm elections will spark an AI backlash and hit demand for a key conductive metal used in data centres."}],[{"start":22.4,"text":"Copper prices on the London Metal Exchange fell 0.5 per cent on Friday to $13,778 a tonne, bringing their fall this week to 2.7 per cent."}],[{"start":33.76,"text":"Copper has tracked the rout in Wall Street tech stocks that followed the Democrats’ victory, which is expected to slow the multitrillion-dollar development of new data centres in the US championed by President Donald Trump."}],[{"start":45.58,"text":"Prices of the red metal soared to record highs this year on the back of lofty forecasts of demand caused by the wave of data centre building."}],[{"start":53.7,"text":"Copper is needed across the AI supply chain, from energy delivery and data centre construction to cooling and computing. Analysts say that by the end of the decade billions of dollars’ worth of the metal will be needed every year for AI data centres, on top of traditional demand in real estate and electrification."}],[{"start":null,"text":"

"}],[{"start":72.32,"text":"Goldman Sachs estimated that states where Democratic lawmakers were likely to restrict data centres accounted for about 45 per cent of planned US capacity."}],[{"start":81.56,"text":"Copper prices previously rose after Trump promised to put a tariff of at least 15 per cent on refined copper imports at the end of this year. This prompted traders to ship large quantities of the metal into the US to avoid the levies, causing shortages elsewhere and driving prices higher."}],[{"start":98.72,"text":"About 90 per cent of the copper stocks stored in the global network of London Metal Exchange and Comex warehouses are now in the US, compared with about 20 per cent two years ago."}],[{"start":109.24,"text":"Some analysts say the chances of US tariffs being imposed have reduced since the midterms, causing prices to fall."}],[{"start":116,"text":"Ole Hansen, head of commodity strategy at Saxo Bank, said the most important driver for copper prices in the short term was “what happens to US import tariffs following such a resounding election defeat for the Republicans”."}],[{"start":129,"text":"He added: “In my view, the result reduces the likelihood of tariffs on refined copper, and this shift in expectations could weigh more heavily on prices in the near term than any potential changes to the longer-term demand outlook.”"}],[{"start":140.84,"text":"Analysts at Deutsche Bank remain bullish on the metal, however, arguing that only a recession would cause a significant drop in its price."}],[{"start":148.72,"text":"“In our view, copper bears need a recessionary spiral from here, whereas copper bulls only need the status-quo trend to persist,” they said."}],[{"start":158.04,"text":"They added that Trump still held the executive power to implement tariffs and that removing them would have little effect on consumer prices, a key issue in the midterms."}],[{"start":167.52,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794019344_6463.mp3"}