Copper Plunges on Thursday

Copper prices have come under heavy selling pressure today, hitting their lowest point in over a month, as a wave of risk aversion grips markets. The AI stock rout resumed this week after both Tesla and Meta missed EPS targets in yesterday’s Q3 earnings with Tesla also undershooting revenues forecasts. The push lower in stocks has dragged copper prices lower with copper closely tied to the AI, alternative energy and electric vehicle sectors given its usage in data centers as well as chip and battery development. Soaring demand from these sectors has been a key driver of the upside we’ve seen in copper this year. If traders suspect that demand from these areas is likely to weaken, this could have heavy downside consequences for copper prices. AI investment in particular has been flagged as a key driver of growth and inflation in the US economy. As such, recent fears over funding levels in AI companies and the prospect of investment starting to cool, could be a major turning point for copper prices if this narrative gathers greater traction.

Copper Tariffs Uncertainty

Copper has also come under pressure this week from reports that the Trump administration is reportedly considering scrapping proposed levies on refined metals imports. Speculation ahead of these anticipated measures has been another big driver of upside in copper this year. If we hear confirmed news that levies will not be introduced, this could again drive heavy selling in copper, similar to what we saw when such levies were scrapped last year.

Technical Views

Copper

The sell-off in copper has seen price breaking down below the rising trend line from YTD lows with price now testing support at 6.3750. Momentum studies are bearish here suggesting risks of a continuation lower. If we do break this support the bull channel lows and 6.1090 level will be the next supports to watch.