Copper prices saw a slight dip as investors grappled with concerns over excessive spending on AI infrastructure, which is heavily reliant on metals, against ongoing supply constraints. The drop came amid a broader selloff in AI and tech stocks, fueled by warnings that financing the rapid expansion of data centers is becoming increasingly challenging. South Korea’s equity benchmark, which has shown a correlation with copper prices this year, plummeted as much as 7%, reflecting the broader market unease.
Supporters of copper argue that demand from AI infrastructure will be a major growth driver in the next decade, and any uncertainty about spending could weigh on market sentiment. However, the primary factor behind copper’s 18% rally this year has been the threat of US import tariffs, which has diverted significant volumes of copper into the country, reducing supply elsewhere. BMI, a Fitch Solutions company, noted that while AI-driven sentiment is not the sole reason for copper’s performance in 2026, it will continue to shape the market narrative in the coming years.
The tightening of the copper market has been exacerbated by disruptions at key mines and the pull of metal into the US. As of Tuesday, the cash price for copper was at a premium of about $132 a ton over the benchmark three-month futures, a condition known as backwardation, indicating a shortage in immediate supply. In China, the Yangshan import premium, a measure of demand, recently hit its highest level since 2022.
On the London Metal Exchange, copper was down 0.2% at $14,596 a ton as of 1:31 p.m. local time. Aluminum fell 0.6%, while zinc prices remained steady.