Copper prices slid to near four-month low amid fears of hike in U.S. interest rates, lower demand, especially from AI

Global benchmark prices of copper declined to a nearly four-month low Friday amid expectations of U.S. Fed increasing interest rates and lowered demand from industries, especially from China and the global technology industry.

At the time of writing, copper was trading about 1.8% lower than the previous day’s close at $13,461.99 per tonne.

“The recent fall in copper prices is mainly due to a stronger U.S. dollar, expectations of higher U.S. interest rates and concerns over weaker industrial demand, particularly from China,” industry body Federation of Indian Mineral Industries (FIMI) told The Hindu.

Copper prices had gradually eased earlier this month following the results of the mid-term elections which gave a divided government to United States, thus assuaging concerns about tariff threats on refined copper imports – primarily responsible for the erstwhile rally.

“Profit booking by investors following the recent price rise and uncertainty over U.S. trade and tariff policies have also contributed to the decline,” the industry body further observed.

In addition to this, the recent Nvidia fallout has cast added apprehension about future investments in the realm of artificial intelligence and related technologies.

Further, the possibility of U.S. Fed hiking interest rates could increase the price of the metal – which is denominated in dollars – thus, bothering industrial activity and sentiment.

According to FIMI, copper prices are expected to remain volatile in the short-term.

“However, the long-term outlook remains positive due to rising demand from power infrastructure, renewable energy, electric vehicles and electronics, along with constraints in global mine supply,” it observed.

It added that lower prices would benefit copper-consuming industries by reducing import costs.

However, it cautioned a prolonged decline could discourage investments in domestic exploration and mining.

“We believe that India should continue to encourage domestic exploration, mining and processing to strengthen its copper supply security and reduce import dependence,” it held.