Copper prices dropped to a near four-month low on Friday, driven by fears of higher U.S. interest rates and weakening demand, particularly from China and the global technology sector. At the time of writing, copper was trading at $13,461.99 per tonne, down 1.8% from the previous day’s close.
The decline was attributed to a stronger U.S. dollar, expectations of higher interest rates, and concerns over weaker industrial demand, especially from China. The Federation of Indian Mineral Industries (FIMI) noted that profit booking by investors and uncertainty over U.S. trade policies also contributed to the price drop.
Adding to the apprehension, the recent fallout involving Nvidia has raised concerns about future investments in artificial intelligence and related technologies. The possibility of U.S. Federal Reserve hiking interest rates could further increase the cost of dollar-denominated copper, potentially impacting industrial activity and sentiment.
FIMI expects copper prices to remain volatile in the short term but maintains a positive long-term outlook due to rising demand from power infrastructure, renewable energy, electric vehicles, and electronics. However, it cautioned that a prolonged decline could discourage investments in domestic exploration and mining, urging India to strengthen its copper supply security and reduce import dependence.