Copper prices are expected to decline further following the U.S. midterm elections, as Democratic gains reduce the likelihood of import tariffs and raise concerns about demand from data centers. Three-month copper futures on the London Metal Exchange fell to about $13,779 per tonne, or $6.25 per lb., on Friday, marking the lowest level since July. The metal has retreated from its September peak of nearly $6.80 per lb. as traders reassess demand and the incentive to stockpile copper in the U.S.
TD Securities managing director Bart Melek warned that copper could face further downside due to weakened expectations for tariffs and potential resistance to data center construction. "With many states slated for significant AI data center development turning blue, and opposition to new construction potentially growing, AI-driven copper demand could fall meaningfully short of current projections," Melek wrote. He also noted that traders believe aggressive copper tariffs are now less likely with the Democratic Party controlling the U.S. Congress.
U.S. copper inventories total about 1.6 million tonnes, but reduced stockpiling incentives could halt additional inflows. BMI research expects copper to average $13,500 per tonne this year and $12,900 in 2027, with mine constraints and electrification demand potentially cushioning any correction. However, BMI also highlighted that U.S. tariff uncertainty remains the clearest near-term catalyst for copper prices.
Supply disruptions, such as those at Freeport-McMoRan’s Grasberg operation and Ivanhoe Mines’ Kamoa-Kakula complex, could limit the decline in copper prices. Meanwhile, Chinese buyers are paying premiums to secure immediately available metal, with the Yangshan import premium exceeding $200 a tonne on Wednesday. Despite this, Melek argues that even China’s demand has not been enough to prevent prices from slipping below $14,000.